The Financial Industry Regulatory Authority (“FINRA”) has seen a significant rise in market manipulation alerts and fraud reports during the COVID-19 pandemic. FINRA is working on improving coordination and transparency in its enforcement efforts as well as its use of market and data analytics to detect potential wrongdoing and fraud amid the COVID-19 pandemic.
FINRA has also seen fraud related to COVID-19 – most of the fraud related to COVD-19 is related to alleged vaccines, cures and testing. FINRA Enforcement’s priorities focuses on protecting the most vulnerable customers, such as retail investors and the elderly. FINRA’s goal is to obtain as much restitution as possible for harmed investors. The elderly customers are a main focus as they may susceptible to manipulation or fraudulent conduct.
FINRA formed a COVID-19 Task Force in March to manage data gathered across the organization and focus on potential fraud by broker-dealers and registered representatives, over-the-counter issuer fraud, insider trading and market manipulation. FINRA and the U.S. Securities and Exchange Commission (“SEC”) are collaborating and coordinating to protect investors from market manipulation and fraud that are emerging during the COVID-19 health crisis. The FINRA task force has referred cases falling out of its jurisdiction to the SEC leading to several trade suspensions.
Should you need assistance dealing with a matter involving FINRA, please contact our law office.