Even though the number of disciplinary actions from the Financial Industry Regulatory Authority has dropped just slightly this year, fines paid to the SRO are expected to be 41% lower from what was assessed in 2012.
In its Disciplinary and Other FINRA Actions report for the first half of 2013, FINRA said there were $23 million of fines—compare that to the same time period last year when the SRO fined brokerage firms and associated individuals $39 million. The total in fines it would assess for 2012 would reach $78 million. This year’s total is estimated to reach $46 million.
One reason for the decline might be that FINRA had already brought its biggest cases related to the market collapse. A decrease in supersize fines of those over $1 million has also occurred during the year’s first six months. However, in July, the SRO reported fining a financial firm $7.5 million while another had to pay investor restitution of $1.5 million. Supersize fines were also imposed on other broker-dealers.
ThinkAdvisor lists the leading five enforcement issues for FINRA for the first half of this year (figures were reported in Disciplinary and Other FINRA Actions): municipal securities, with 25 case at $4.3 million; electronic communication, with 25 cases at $2.5 million; mutual funds with 18 cases at $21 million; suitability, with 31 cases at $1.7 million; and short selling, with 16 cases at $1.5 million.
FINRA is the biggest independent regulator of securities firms in the US—4,215 broker-dealers (and their branches) and about 633,620 brokers. It is here to protect investors and ensure market integrity.
Many securities cases are resolved via FINRA arbitration. You want to work with an experienced FINRA arbitration lawyer that can help your recover your investment fraud losses. Our securities fraud law firm represents investors throughout the country.
FINRA Fines On Track to Fall 41% This Year, ThinkAdvisor, September 6, 2013
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FINRA Enhances Its Arbitrator Vetting Policy, Stockbroker Fraud Blog, August 26, 2013
Citigroup Must Pay $11M Claimant for Royal Bank of Scotland Investment Losses, Says FINRA Arbitration Panel, Institutional Investor Securities Blog, August 7, 2013
GAO Wants SEC to Look At Other Criteria for Who Qualifies As An Accredited Investor, Institutional Investor Securities Blog, July 31, 2013