FINRA, the Financial Industry Regulatory Authority levied a total of $68 million in civil fines during 2012, according to statistics released by FINRA on Tuesday, January 8, 2013. This was slightly less than $71.9 million imposed by FINRA in 2011. The high-profile cases against large brokerages accounted for about one-third of total fines in 2012.
It was also noted that FINRA ordered brokerages to repay harmed investors a record $34 million.
FINRA oversees about 4,290 brokerages and 630,000 brokers.
Many of FINRA’s cases against Wall Street’s largest brokerages in 2012, including Morgan Stanley, Merrill Lynch, UBS, AG, and Wells Fargo Corp. These cases stem from FINRA’s increased interest in potential conflicts of interest and complex products, such as certain types of exchange-traded funds, said Richard Ketchum, FINRA’s chairman and chief executive, in an interview with Reuters.
These priorities “will result in more cases against large firms because they’re the ones engineering those products and the ones that have many of the conflicts because of their complexity,” Ketchum said. For example, brokerage units that underwrite offerings of certain risky products stand to profit when retail brokers in the same firm boost sales of those products by pushing them to investors, even though they may not be suitable.
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, represents clients nationwide before FINRA. If you or a loved one have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. Visit our website at: https://www.securitieslawyer.com.