Financially Wronged Investors Are Still Waiting on Payouts From Brokers

Pennygem

More than $5 million of almost $21 million in arbitration awards have not been paid by firms to wronged investors. PennyGem’s Elizabeth Keatinge has more.

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00:00 Many people who are entitled to compensation from a broker who harmed them financially

00:08 are still waiting for their payout.

00:10 30% in 2020, actually.

00:13 That's according to the Public Investors Advocate Bar Association.

00:16 The report says that percentage is for people who have already won arbitration rulings from

00:21 the Financial Industry Regulatory Authority.

00:24 It's an independent, self-regulatory organization that oversees brokers and brokerage firms.

00:30 As CNBC explains, when companies mishandle money, investors can fight for compensation

00:36 through FINRA.

00:37 For 2020, FINRA reported 64 arbitration awards worth $20,895,826.21.

00:48 Of these totals, 19 awards, totaling $5,050,328.98, were not paid.

00:56 A FINRA spokesperson told CNBC, "Lack of payment typically results from respondents

01:02 declaring bankruptcy or going out of business."

01:06 FINRA says firms need to be required to raise or preserve more funds, expand insurance coverage,

01:12 and create a fund for unpaid awards and more.

01:14 For those changes, however, federal legislation or SEC involvement is needed.

01:19 [MUSIC PLAYING]

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