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June 23, 2014 at 03:42 AM
The Financial Industry Regulatory Authority brought 1,535 disciplinary actions against registered individuals and firms in 2013 and levied fines totaling more than $60 million, according to FINRA’s annual report, released Friday.
In addition, FINRA says that it expelled 24 firms from the securities industry, suspended 38 firms, barred 429 individuals and suspended 670 brokers from association with FINRA-regulated firms last year.
In addition to taking disciplinary action, the self-regulator says that it obtained $9.5 million in restitution for investors who were harmed last year, and through June has ordered more than $26 million in restitution.
FINRA CEO Richard Ketchum notes in the report that FINRA will continue to further its examination program via the controversial Comprehensive Automated Risk Data System (CARDS), which he says is “the next step — and an important leap forward — in the evolution of [FINRA’s] risk-based regulatory program.”
CARDS would be a rule-based program that would allow FINRA to collect — on a standardized, automated and regular basis — account information, as well as account activity and security identification information from firms.
“By providing us with ongoing ‘birds-eye view’ surveillance to complement our onsite exams, CARDS will allow us to quickly identify trends and product concentrations that are harmful to investors and take swift, responsive action,” Ketchum said.
Ketchum said in the report that “innovation, technology and risk mitigation” characterized FINRA’s operations in 2013, “and underpin our vision of the future of securities firm regulation.”
In 2013, FINRA invested nearly 25% of its annual budget in innovative technology, including cloud computing, in order to build sophisticated surveillance systems and process extraordinary amounts of data.
“We envision a new day in regulation, where, with the use of modern technology — particularly the capability to manage and analyze vast amounts of data — we can see more and different information in a new way,” Ketchum said. “Our goal is to expand our ability to identify, assess and manage risks in a cost-effective manner, and better focus our resources on the areas that pose the greatest threat to investors and the markets.”
