Thursday, September 9, 2010

Northern District of California Judge denies review of FINRA decision

San Francisco Judge Lucy Koh, denied Pyramid Financial Corp. review of a decision by the Financial Industry Regulatory Authority (FINRA) which may "shut Pyramid down."

According to court documents, FINRA recently imposed an arbitration judgment against Pyramid which FINRA argued put Pyramid below the "net capital rule" imposed for brokerages to do business.  FINRA stated that if Pyramid could not show it had adequate capital it must immediately stop securities trading.  Pyramid sought a preliminary injunction to allow it to keep trading arguing that it has 30-days to appeal the arbitration and therefore should have that much time to raise the necessary capital.

Judge Koh never answered that question, instead she explained that the Security and Exchange Commission (SEC) reviewed FINRA decisions and that those decisions were properly appealed to the U.S. Courts of Appeals.  U.S. District Courts have no subject matter jurisdiction to hear the case.

Judge Koh dismissed the case.

The Case is Pyramid Financial Corp. v. FINRA No. C 10-3797

Here is the opinion:
Pyramid v. FINRA

No comments:

Post a Comment