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June 05, 2018 at 09:26 AM
FINRA enforcement chief Susan Schroeder.
Editor’s note: This interview first appeared in Human Capital, a newsletter by Washington Bureau Chief Melanie Waddell about the people who shape the financial regulatory space.
Welcome back! This edition of Human Capital hits as the markets are absorbing the shock of the Trump administration’s Thursday tariffs announcement. But also on the minds of industry watchers is how the Financial Industry Regulatory Authority is moving along in integrating its two enforcement divisions — now aptly called “One Enforcement” by the broker-dealer self-regulator.
Who’s the person to ask? Susan Schroeder, of course, who heads FINRA’s enforcement team. During a recent FINRA Unscripted podcast, she laid out where her team stands and where it’s headed. I checked in late this week with FINRA and its former enforcement head Brad Bennett to follow up on some of Schroeder’s comments.
FINRA chief Robert Cook said recently that merging FINRA’s two enforcement divisions under FINRA360 over the last year “took a lot of work,” that it was “progressing remarkably well” and that integration was “essentially complete.”
Schroeder, Cook said, will “continue to evolve the program” this year. Schroeder agreed, stating in the late May podcast that the One Enforcement team is “building this path as we walk on it.”
The bottom-line benefit in combining FINRA’s legacy enforcement group with its legacy market regulation legal group: “A more consistent and foreseeable enforcement program,” Schroeder said.
A regulator “is only effective when the entities or individuals that it regulates know what the regulator is going to do. You need to know whether or not your conduct violates a rule. You need to understand the consequences of what misconduct will be. That’s the whole point, really, of the regulatory structure — deterrence and remediation — and we cannot achieve deterrence unless we are extremely clear about what’s OK and what’s not OK.”
