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October 07, 2016 at 01:38 AM
Fines levied by the Financial Industry Regulatory Authority during the first half of 2016 reached $79.4 million, which is on pace to potentially shatter the self-regulator’s record-setting $134 million in fines reported in 2014, according to the law firm Sutherland Asbill & Brennan.
Eleven “supersized” fines of $1 million or more—four of which were “ginormous” fines of $5 million or more—made up a hefty $57.1 million of the first-half 2016 total.
This compares to six “supersized” fines—including one “ginormous” fine—totaling $17.8 million that FINRA levied in the first six months of 2015, according to Sutherland’s annual analysis of the disciplinary actions filed by FINRA.
Total fines levied by FINRA in the first six months of 2016 increased 69% compared to the same period in 2015, and 19% compared to the same period in record-setting 2014, when FINRA assessed $134 million in fines, the Sutherland report states.
The largest single fine against a firm so far in 2016 was $20 million for making negligent material misrepresentations and omissions regarding costs and benefits on variable annuity replacement applications for tens of thousands of customers over a five-year period.
Brian Rubin, head of Sutherland’s Washington litigation practice group, said in releasing the report that “to avoid being the subject of one of these actions, firms should consider focusing on ‘nuts and bolts’ issues like marketing and suitability of products, AML, trade reporting and supervisory policies and procedures.”
