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Regulation and Compliance > Federal Regulation > FINRA

FINRA Execs Continue to Earn Big Bucks

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Executives at the Financial Industry Regulatory Authority continue to pull in big bucks — especially in comparison to their Securities and Exchange Commission brethren — with retiring CEO Richard Ketchum earning $2.9 million in total compensation in 2015.

Incoming FINRA CEO Robert Cook, the former director of the Securities and Exchange Commission’s Division of Trading & Markets, who hails from Cleary Gottlieb Steen & Hamilton, won’t see as drastic a pay cut as a transition to public service often entails, according to The American Lawyer.

Cook and his partners at Cleary Gottlieb took home average profits of about $3.1 million in 2015, according to The American Lawyer’s latest Am Law 100 financial survey.

SEC Chairwoman Mary Jo White, for her part, will be paid $170,400 this year. White is a government employee paid out of the U.S. Treasury. FINRA, by contrast, is a nonprofit organization funded primarily through its investment portfolio and the fines it collects.

According to FINRA’s annual report, released Thursday, the self-regulator paid its chief legal officer, Robert Colby, $1.2 million in 2015, while its chief of enforcement, J. Bradley Bennett, earned $1.06 million.

Colby told attendees at FINRA’s annual conference in late May that the regulator is “on the verge” of making changes to broker qualification exams and plans to file soon with the SEC its rule to allow brokers to delay disbursement of funds if elder fraud is suspected.

Colby also said that FINRA plans to “split” the Series 7 exam into two levels – basic and specialized. The basic course can be taken by “anyone,” he said, “you don’t have to be [a broker] to take it.” The specialized exam track would be taken by someone “who wants to do business” such as a trader or a broker working in “general securities.”

Susan Axelrod, head of regulatory operations at FINRA, earned $1.1 million in 2015. She spearheaded FINRA’s Securities Helpline for Seniors, which just celebrated its one-year anniversary. To date, the helpline has fielded more than 4,600 calls, recovering more than $1.3 million in voluntary reimbursements from firms since its launch last April.

As to enforcement, FINRA reported Thursday that while the number of monetary sanctions increased 7% from 645 in 2014 to 691 in 2015, total fines decreased year over year. However, disgorgements increased from $1.8 million in 2014 to $2.8 million in 2015.

In 2015, FINRA brought 1,512 disciplinary actions against registered brokers and firms and levied $93.8 million in fines.

FINRA also ordered $96.6 million in restitution to harmed investors — almost three times the amount of restitution ordered in 2014. Among those actions included two firms being ordered to pay a total of $15.3 million in restitution to customers in Puerto Rico, in connection with the firms’ supervisory failures related to the sales of Puerto Rican municipal bonds and closed-end funds.

Twelve firms were also ordered to pay more than $4 million in restitution for missed sales charge discounts for unit investment trust purchases, and orders for ten firms to pay more than $48 million in connection with sales charge discounts for charities and retirement accounts.

— Check out FINRA Posts Loss for 2015 as Costs Rise, Fines Drop 30% on ThinkAdvisor.


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