DC Circuit Ruling Deals Blow to FINRA's Disciplinary Authority: SEC Roundup

According to Barnes, the ruling represents an "enormous victory" for Alpine Securities, as it ensures SEC review before any expulsion can take effect.

The decision's implications extend beyond this single case, potentially affecting FINRA's broader enforcement authority and creating what Barnes describes as "a giant target on FINRA's back."

Jennifer Schulp, director of Financial Regulation Studies at Cato Institute, noted that the ruling comes amid increasing challenges to FINRA's authority, boosted by recent Supreme Court decisions questioning administrative agency powers.

While the majority opinion focused narrowly on requiring SEC review before expulsion, a notable concurring opinion by Judge Walker suggested FINRA's entire structure might be unconstitutional.

The decision leaves open broader questions about FINRA's status as a self-regulatory organization that sometimes acts as a private entity and other times as a governmental one, setting the stage for future constitutional challenges to its authority.