FINRA’s Sanctions Drop in 2013

The Financial Industry Regulatory Authority's (FINRA) 2013 fines and disciplinary actions are short of the 2012 totals. During the first half of 2013, FINRA reported $23 million of fines in its monthly "Disciplinary and Other FINRA Actions." However, during the first half of 2012, FINRA reported fines of broker-dealers and associated persons at $39 million, and it assessed fines of $78 million for all of 2012. If FINRA continues at the current 2013 rate, 2013’s fines will represent a 41% decrease from the total fines reported by FINRA in 2012. This would be the lowest amount of fines assessed by FINRA since $45 million of fines were imposed in 2010.

The top five enforcement issues for FINRA during the first half of 2013 were:

(1) Municipal securities: $4.3 million in 25 cases;

(2) Electronic communications: $2.5 million in 27 cases;

(3) Mutual funds: $2.1 million in 18 cases;

(4) Suitability: $1.7 million in 31 cases;

(5) Short selling: $1.5 million in 16 cases.

2013 could turn out to be a year of significant slowdown for FINRA. Mainly because a large number of cases related to the financial crisis have already been resolved. However, it is possible that the second half of 2013 may be different from the first. In July, FINRA reported in its "Disciplinary and Other FINRA Actions" that it fined one firm $7.5 million and ordered the firm to pay $1.5 million in restitution to investors for "systematic electronic email retention and review issues." FINRA also reported in its August publication that it imposed “supersized” fines against three other firms. It remains to be seen whether these recent cases are a sign of increased disciplinary activity in the last half of 2013.

Call Soreide Law Group at 888-760-6552 for a free consultation regarding your financial losses.

The Financial Industry Regulatory Authority's (FINRA) 2013 fines and disciplinary actions are short of the 2012 totals. During the first half of 2013, FINRA reported $23 million of fines in its monthly "Disciplinary and Other FINRA Actions." However, during the first half of 2012, FINRA reported fines of broker-dealers and associated persons at $39 million, and it assessed fines of $78 million for all of 2012. If FINRA continues at the current 2013 rate, 2013’s fines will represent a 41% decrease from the total fines reported by FINRA in 2012. This would be the lowest amount of fines assessed by FINRA since $45 million of fines were imposed in 2010.

The top five enforcement issues for FINRA during the first half of 2013 were:

(1) Municipal securities: $4.3 million in 25 cases;

(2) Electronic communications: $2.5 million in 27 cases;

(3) Mutual funds: $2.1 million in 18 cases;

(4) Suitability: $1.7 million in 31 cases;

(5) Short selling: $1.5 million in 16 cases.

2013 could turn out to be a year of significant slowdown for FINRA. Mainly because a large number of cases related to the financial crisis have already been resolved. However, it is possible that the second half of 2013 may be different from the first. In July, FINRA reported in its "Disciplinary and Other FINRA Actions" that it fined one firm $7.5 million and ordered the firm to pay $1.5 million in restitution to investors for "systematic electronic email retention and review issues." FINRA also reported in its August publication that it imposed “supersized” fines against three other firms. It remains to be seen whether these recent cases are a sign of increased disciplinary activity in the last half of 2013.

Call Soreide Law Group at 888-760-6552 for a free consultation regarding your financial losses.