Vindicated Financier Sues FINRA, Igniting Due Process Debate

NEW YORK, NY – January 12, 2026 – After a multi-year battle that placed his career and reputation in the balance, James Lukezic, the Managing Principal of Old Slip Capital Management, has been fully exonerated by the Financial Industry Regulatory Authority (FINRA). The regulatory body found no evidence to support allegations that he executed unauthorized trades, a vindication that has now pivoted into a legal offensive against the regulator itself and one of the nation's largest fund families.

The case centered on allegations involving five trades totaling $1.1 million, which were said to have caused $44,000 in losses to client accounts. Following extensive hearings that ran from October to December 2025, FINRA's Office of Hearing Officers concluded that there was no evidence Mr. Lukezic had executed or authorized the trades in question. Furthermore, the proceedings confirmed that no client funds were lost as a result of his actions, or at all.

While the decision closes a painful chapter for the 25-year industry veteran, it has simultaneously opened a new, more confrontational one. On January 9, 2026, Mr. Lukezic filed an amended complaint in federal court not only against FINRA but also adding American Funds (Capital Group) as a defendant. The lawsuit seeks accountability for what he claims were false allegations and the significant professional harm he endured.

The High Cost of Allegation

For financial professionals, an investigation by FINRA can be a career-altering event, regardless of the outcome. The initial allegations against Mr. Lukezic, which claimed violations of FINRA Rule 2010 regarding commercial honor, triggered a public disclosure on Form U6. This information is disseminated through FINRA's BrokerCheck database, a public-facing tool used by investors, employers, and compliance departments to vet advisors.

Once a U6 disclosure appears, it can cast a long shadow. The public record of an unresolved allegation can lead to client defections, lost business opportunities, and a cloud of suspicion that is difficult to dispel. For Mr. Lukezic, who founded Old Slip Capital Partners after a long career at prestigious firms like Merrill Lynch, Citigroup, and Oppenheimer & Co., the public nature of the allegations represented a direct threat to the “unconflicted investment environment” he sought to build.

The path to exoneration was arduous. Before the hearings that ultimately cleared his name, Mr. Lukezic attempted to halt the disciplinary proceedings. In March 2025, he sought a preliminary injunction, arguing the process itself would cause irreparable constitutional and economic harm. However, U.S. District Judge Dabney L. Friedrich denied the request in August, underscoring the high legal bar for interfering with a regulatory body's internal process and forcing Lukezic to see the fight through FINRA's own channels.

A System Under Scrutiny

With his name cleared, Mr. Lukezic is now aiming his fire at the system that he believes wronged him. His case highlights a growing chorus of criticism and legal challenges questioning the immense power wielded by FINRA, a private, self-regulatory organization (SRO) that polices the entire brokerage industry.

“The truth and evidence prevailed,” Mr. Lukezic stated following his exoneration. “My reputation means everything to me, and I am grateful that the facts demonstrated my complete innocence in this matter. The larger issue is if the SEC will reform FINRA and specifically its Enforcement unit to bring its power to prosecute in line with the United States Constitution, allowing for due process and the elimination of hearsay evidence.”

His call for reform touches on long-simmering debates over FINRA’s quasi-judicial authority. Critics argue that its enforcement proceedings lack the full protections of a federal court, such as robust discovery rules and the strict prohibition of hearsay. These concerns have fueled multiple constitutional challenges. In a separate case, Alpine Securities Corp. v. Financial Industry Regulatory Authority, the firm challenged FINRA’s power to expel members without prior SEC review, arguing it violated constitutional principles. While the Supreme Court declined to hear that case in 2025, the underlying questions about FINRA's authority persist.

Legal advocacy groups have argued that FINRA's structure as an SRO creates a system of “private justice” that can run roughshod over the due process rights of its members. Mr. Lukezic’s public call for reform, backed by his own experience, adds a powerful voice to this ongoing debate.

The Ripple Effect: Lawsuit Targets Regulator and Fund Giant

The amended lawsuit filed in the U.S. District Court for the District of Columbia (Case No. 1:25-CV-00623) represents a significant escalation. By adding American Funds, a division of the Capital Group, as a defendant, the legal action suggests that accountability for false allegations may extend beyond the regulator to the institutions involved in the initial reporting.

The inclusion of a major fund family raises critical questions about the chain of responsibility in customer complaints and regulatory referrals. While the specific claims against Capital Group are not yet public, the move signals an attempt to scrutinize the origins of the information that led to FINRA's investigation. It poses a potential challenge to the standard procedures by which financial institutions handle and report disputes, potentially creating new liabilities if their internal reviews are found to be flawed or to have contributed to baseless regulatory action.

This multi-front legal strategy—targeting both the regulator for its process and a financial institution for its alleged role in the complaint—could create a new playbook for exonerated professionals seeking redress. It suggests that merely winning a case before a FINRA hearing panel is no longer the end of the road, but potentially the beginning of a new fight for damages and systemic change. The outcome of this lawsuit will be closely watched by compliance departments, legal experts, and financial advisors across the industry, as it could redefine the risks and responsibilities for all parties involved in a regulatory dispute.