The Financial Industry Regulatory Authority is on a pace to far exceed this year the number of fines and disciplinary actions against financial advisors it imposed last year, according to a review by an industry law firm.
Lawyers at Sutherland Asbill & Brennan LLP found that during the first half of 2012, FINRA ordered broker-dealers and associated persons to pay $39.4 million in fines.
“If fines continue to be assessed at this rate, 2012 will represent a 15% increase from the total fines reported by FINRA in 2011,” said Sutherland partner Brian L. Rubin.
“Essentially, we are looking at a jump from $68 million in 2011 to projected fines of $78.4 million in 2012.”
A review in March of 2011 fines by Rubin and fellow partner Partners Deborah G. Heilizer found that FINRA fines that year jumped 51% from 2010.
Similarly, the projected number of 2012 disciplinary actions would represent the fourth straight year of growth. In 2009, the number of disciplinary actions grew by 8% over 2008 and by 13% in both 2010 and 2011 over each prior year.
Furthermore, the attorneys found that 609 cases were reported by FINRA during the first half of 2012; if cases are brought at this same rate for the rest of the year, the number of cases is projected to surpass 2011’s total disciplinary actions by nearly 9%, the two lawyers said.
Robert Miller, president of the National Association of Insurance and Financial Advisors, voiced concern about the findings.