The Financial Industry Regulatory Authority is on pace to file “a record number of cases this year,” with top compliance failures in the areas of suitability, cybersecurity and anti-money laundering, according to the self-regulator’s chief of enforcement.
“FINRA enforcement continues to have a strong caseload, with a record number of cases on the same pace this year as last,” Brad Bennett, FINRA’s chief of enforcement, told attendees at FINRA’s annual conference in Washington on Wednesday.
As of March 31, FINRA had handed out 306 disciplinary actions, levied a total of $8.5 million in fines and ordered firms to pay $1.9 million in restitution. The self-regulator has also barred 59 reps, expelled three and suspended 128.
FINRA’s newly implemented risk-based exam program is “taking hold,” Bennett said, and “while the number of cases has remained constant the fines are tailing off a bit.” FINRA continues to see a “significant” number of single broker malfeasances, including petty theft, dishonesty, forgery and failure to report on their U-4, he said.
Bennett also noted that FINRA is “seeing the end” of cases related to the 2008 financial crisis.
Susan Shroeder, FINRA’s deputy in charge of its New York operations, was on hand to talk about the areas where FINRA was seeing the most problems. First, she said, was in the area of complex or structured products—a priority area for FINRA. “We’ve seen an increase in the sales of these to retail consumers and the top issue is reasonable basis suitability,” she said.