In one court proceeding, they claim absolute immunity and also say they’re not liable for not doing their job.
A. Absolute Immunity
First, FINRA first correctly notes that as a self-regulatory organization, i.e., the successor entity to NASD, it is absolutely immune from money damages for any acts or omissions related to its regulatory function. See P’ship Exch. Sec. Co. v. Nat’l Assn. of Sec. Dealers, Inc., 169 F.3d 606, 608 (9th Cir. 2009); Sparta Surgical Corp. v. Nat’l Assn. of Sec. Dealers, Inc., 159 F.3d 1209, 1213 (9th Cir. 1998) (“We . . . hold that a self-regulatory organization is immune from liability based on the discharge of its duties under the [Securities] Exchange Act [of 1934].”). In opposition, Plaintiffs argue that the facts of the present case are more egregious than the facts of the cited cases. But the respective merits of the cases are inapposite to whether FINRA was acting in its regulatory capacity in both instances, and it clearly was.
B. No Private Cause of Action
Second, FINRA is correct that, even if not covered by absolute immunity, there is no private cause of action to compel or prevent actions by FINRA related to its regulatory authority. See Sparta Surgical Corp., 159 F.3d at 1213 (“It is undisputed, even by [the plaintiff], that a party has no private right of action against an exchange for violating its own rules or for actions taken to perform its self-regulatory duties under the [Securities Exchange] Act [of 1934]. Thus, to the extent that [the plaintiff] seeks private relief for NASD or NASDAQ’s breach of their own rules, its claims are barred.” (citation omitted)). All claims here arise out of FINRA’s performance of its self-regulatory duties. Again, Plaintiffs’ arguments in opposition that the facts of the present case are more egregious than the facts of the cited cases are unavailing.
In Closing
And they can decide whether to do their job or not and are not liable for doing their job (or not)- even if done poorly.
This is all for the record btw.
*Not Valid Financial, Legal, Life, or Any Advice