What You Need To Know About FINRA

Jeff "fuzzy" Wenzel
2 min readMay 16, 2022
Photo by Arisa Chattasa on Unsplash

If you’re involved in equity fundraising as an entrepreneur or investor, you know that the real success of the system relies on trust and integrity. And when that integrity is called into question, you need to know that watchdog organizations are tasked with enforcing ethical behavior and punishing entities that circumvent that behavior.

The Financial Industry Regulatory Authority, more commonly known as FINRA, is a not-for-profit organization overseen by the Securities and Exchange Commission that protects investors and ensures the integrity of the securities industry. FINRA oversees brokerage firms in the United States, writes rules, examines for and enforces compliance with FINRA rules and federal securities laws, registers broker-dealer personnel and offers them education and training, and informs the investing public. FINRA also provides surveillance and other regulatory services for equities and options markets and trade reporting, and other industries.

In 2020 alone, FINRA handed down 808 disciplinary actions against registered brokers and firms that were found to have acted unethically, called for fines totaling $57 million, ordered $25.2 million in restitution to harmed investors, and referred more than 970 fraud and insider trading cases to the SEC and other agencies for litigation and/or prosecution.

High-Tech Surveillance

One of FINRA’s most potent tools is the technology it uses to run surveillance algorithms on as many as 600 billion transactions every day to detect abnormalities and potential threats of market manipulation, insider trading, and other threats to the integrity of public trading markets. As one of the largest data processors in the world, it polices more than 3,400 broker-dealer firms and nearly 620,000 registered participants in public markets.

KiwiTech is dedicated to staying current with FINRA’s rules and regulations about equity crowdfunding, which are evolving almost as fast as the crowdfunding landscape itself. Experts see the crowdfunding market reaching nearly $200 billion in value by 2025, and successful Regulation Crowdfunding (Reg CF) offerings have created more than 120,000 new local jobs.

Our Responsibility

FINRA’s rules for equity crowdfunding and its enforcement, such as Reg CF’s $5 million equity maximum, are a welcome development for investors. The rules will help protect investors from scams and fraudulent activity while also making it easier for them to invest in startups.

We are constantly monitoring for any new developments or updates from FINRA because our clients must be confident that they are compliant with all relevant regulations. Therefore, we do everything to monitor all changes and help them stay on top of the latest changes.

Equity crowdfunding has the potential to revolutionize the startup investing landscape by making it easier and more accessible for everyone. However, like in any place where money is involved, there is always the potential for fraud and scams. That’s why FINRA’s rules are so important.

Don’t forget to follow me online: https://linktr.ee/fuzzywenzel



Jeff "fuzzy" Wenzel

Startup Fundraising Re-Imagined 🤔 Retail Investor 💰 Startup Advisor 🏆 Innovation Enthusiast 🥳