Fines imposed by the Financial Industry Regulatory Authority in 2014 are poised to far outpace those reported by the regulator in 2013, according to an analysis released Aug. 1 by the law firm Sutherland Asbill & Brennan.
FINRA assessed $42.4 million in fines in the first half of 2014, compared with $23 million during the first half of 2013.
Sutherland gleaned the fine data from FINRA’s monthly “Disciplinary and Other FINRA Actions” publications. FINRA reported fining broker-dealers and associated persons $57 million in 2013.
If FINRA continues to assess fines in 2014 at the current rate, Sutherland says that 2014′s fines will represent a 49% increase from the total fines reported by FINRA in 2013 to an estimated $85 million in 2014. “That figure would represent the highest amount of fines reported by FINRA since the financial crisis,” according to Sutherland’s analysis, and the most fines reported by FINRA since 2006 ($111 million).
The top enforcement issues for FINRA during the first half of 2014, in terms of the total fines reported in FINRA’s monthly tallies, include:
Books and Records: $13.7 million in fines, 61 cases
Anti-Money Laundering: $11.3 million in fines, 17 cases
Net Capital: $9.7 million in fines, 18 cases
Unregistered Securities: $9.2 million in fines, 11 cases
Trade Reporting: $6.7 million in fines, 92 cases
Indeed, Sutherland notes the first six months indicate that 2014 “will likely be a year of substantial increases in FINRA fines,” as FINRA “appears to be repositioning itself as its actions shift from cases relating to the financial crisis to more technical issues,” such as books and records, and trade reporting violations.