Russ Ryan argues that the Supreme Court’s recent decision in Galette v. New Jersey Transit Corporation may undermine decades of court‑created “regulatory immunity” for FINRA and other self‑regulatory organizations. The author explains that although FINRA is a private corporation not bound by constitutional limits, courts have simultaneously granted it sweeping immunity from lawsuits when acting as a regulator—an arrangement he describes as fundamentally unfair. This immunity, originating from cases dating back to the 1980s, has allowed SROs to impose significant penalties and reputational harm through procedures that provide only limited due‑process protections, without meaningful judicial oversight. [linkedin.com]
The article emphasizes that the Supreme Court has never explicitly endorsed absolute immunity for SROs, and the Court’s unanimous ruling in Galette—though arising from unrelated transit‑accident cases—suggests a narrower view of when immunity should apply. According to the author, this development places the future of FINRA’s long‑standing immunity in doubt and could open the door to renewed constitutional challenges to the organization’s enforcement powers
https://www.linkedin.com/pulse/did-scotus-just-strip-finras-regulatory-immunity-russ-ryan-pdele
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Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.
He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page - SECLaw.com, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.
