Category Archives: Financial Industry Regulatory Authority (FINRA)

Agentic AI in Retail Investing: Navigating Regulatory and Operational Risk

by Charu Chandrasekhar, Avi Gesser, Jeff Robins, Kristin Snyder and Achutha Raman

Left to Right: Charu Chandrasekhar, Avi Gesser, Jeff Robins, Kristin Snyder and Achutha Raman (Photos courtesy of Debevoise & Plimpton LLP)

The Rise of AI-Driven Investing in Retail Finance

Generative artificial intelligence (“GenAI”) innovations are rapidly transforming the formulation, analysis, and delivery of investment advice. Many broker-dealers and investment advisers are embracing GenAI to support one or more parts of the investment lifecycle—synthesizing investment research; undertaking trend analysis, anomaly detection, and pattern recognition for risk modeling and market surveillance; and performing large-scale data extraction and analysis.

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DC Circuit Enjoins FINRA Disciplinary Proceeding, Questions Constitutionality of Hearing Officers

by Sara Raisner and Mark Lanpher

Photos of the authors

Sara Raisner and Mark Lanpher (Photos courtesy of Shearman & Sterling)

On July 5, the United States Court of Appeals for the D.C. Circuit granted an emergency injunction blocking the Financial Industry Regulatory Authority (“FINRA”) from halting the securities business of Alpine Securities Corporation (the “Company”) through an expedited hearing process pending the Company’s appeal challenging the constitutionality of FINRA’s enforcement proceedings.  Alpine Securities Corporation, et al v. Financial Industry Regulatory Authority, Inc., 1:23-cv-01506-BAH (July 5, 2023).  While noting that this was not a decision on the merits, the court found that the Company had shown a likelihood that it will succeed on the merits in its challenge to the structure of FINRA enforcement actions, having at this early stage “raised a serious argument that FINRA impermissibly exercises significant executive power.”

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