The Financial Industry Regulatory Authority banned me from the financial industry for life and imposed a $243,000 fine.
I magine being dragged into a courtroom where the judge works for the prosecutor — and if (or, when) you lose, this judge-prosecutor pockets the money. Welcome to the dystopian world of FINRA, the Financial Industry Regulatory Authority.
FINRA, a “self-regulatory organization,” enforces federal securities laws but operates without the safeguards of a fair legal system. Discovery is one-sided: You must hand over everything, but you get nothing. You can’t object or cross-examine witnesses, and you testify under oath without deposing anyone on the other side. Loss is a near guarantee; fairness is nonexistent. If you lose, FINRA collects fines and keeps the money for itself.
The Supreme Court has ruled that similar in-house tribunals at other agencies are unconstitutional. Challenging FINRA’s private justice system has never been more timely or urgent.
I became a broker in 1971, and I founded Southeast Investments in 1997, which grew to 140 brokers. I had a cordial, professional relationship with FINRA for a quarter century. They examined our firm about every two years, and we updated procedures to follow every reasonable suggestion. There was never any fraud, client harm, or serious rule violation.
Everything changed in 2012. Unlike previous audits, the one conducted that year dragged on and led to formal charges in 2015, none of which related to customer harm. Instead, they targeted our email-retention process, a system consistent with what FINRA had recommended in 2008. Brokers forwarded client emails to our office, where I printed, reviewed, and stored them — a system long considered compliant.
Suddenly, FINRA said the FINRA-recommended system violates the rules because it relies on brokers retaining business-related emails. But what system doesn’t? A broker can just as easily call or send a letter without leaving a record. What mattered was that we had competent brokers and a functioning system. But FINRA wanted us to monitor and retain employees’ business as well as personal emails. Our error? A Southeast representative did not retain 16 personal emails of his wife.
The real injustice began when we tried to defend ourselves. During FINRA’s in-house “trial,” their prosecutors withheld key evidence, specifically the notes from brokers’ interviews. We repeatedly requested those notes; FINRA denied they existed. At the hearing, a FINRA examiner admitted under oath to taking notes, but the judge — a FINRA employee — refused to grant access to them.
When an appeals panel was ordered, FINRA finally produced emails summarizing those notes. The original notes were never provided, because they were supposedly “lost” in a FINRA paper shuffle. Despite lacking some valuable evidence, the emails proved FINRA’s witnesses had lied in the trial.
That wasn’t enough for the FINRA judge to toss out the case against me. FINRA banned me from the financial industry for life and imposed a $243,000 fine.
We appealed to the Securities and Exchange Commission (SEC), which affirmed some findings but remanded others after acknowledging FINRA’s failure to preserve evidence. Yet the SEC refused to sanction FINRA for violating the same record-keeping rules it fined us for violating. Think about that: FINRA violated the same rule — 17A of the 1934 Securities Exchange Act — that it weaponized against me.
In June 2025 — after a trip to the federal district court and the federal appeals court, then back to the SEC and back to FINRA — the FINRA judge dismissed the most serious charges against me. After over a decade, the only allegations left involve 16 personal emails unrelated to securities, yet they carry $73,500 in fines. That ruling is now on appeal in federal court.
So why continue the fight?
Most brokers lack the resources or stamina to fight FINRA’s one-sided system. They fold, settle, or accept lifetime bans rather than endure years of FINRA’s abuse.
But this is America. We’re supposed to have fair trials before impartial judges, not ones paid from the fines they impose. That’s not justice; it’s extortion disguised as law. With help from the Pacific Legal Foundation, I’m challenging this system — not just for me, but for every broker and business owner who believes in due process.
Recent Supreme Court decisions in cases like Lucia v. SEC, Axon v. FTC, and SEC v. Jarkesy have made one thing clear: The Constitution still matters, especially to shadow regulators like FINRA. It’s about time that FINRA bring its cases in federal court, or the SEC require it.
Congress should act, or courts should strike down FINRA’s in-house injustice. No American should be tried, fined, and barred from their profession by industry insiders acting as judge, jury, and beneficiary.