The Financial Industry Regulatory Authority reported a net loss of $68.7 million in 2018, driven primarily by an operating loss of $29.2 million, coupled with investment losses and other expenses of $39.5 million, according to the broker-dealer self-regulator’s annual financial report, released Thursday.
Over the last five years, FINRA has reported cumulative net income of $120.1 million, as well as an average annual decrease in expenses of 0.4%, FINRA CEO Robert Cook stated in the annual report.
“FINRA continues to maintain a strong balance sheet to support its operations, with approximately $1.5 billion in equity (net assets) as of Dec. 31, 2018,” Cook said.
The primary driver of the $68.7 million loss was a 2.3% loss on FINRA’s investment portfolio in 2018.
FINRA’s portfolio return was 8.8% in 2017 versus the 2.3% loss in 2018.
“The investment climate of 2018 was characterized by a volatile fourth quarter that led to broad-based losses across global equity markets, as measured by the S&P 500 (-4.4%) and the MSCI All Country World Index (-8.9%),” a FINRA spokesperson said.
“Bonds finished the year with roughly flat results. That being said, FINRA’s loss was modest relative to several common market indices and standard portfolios of equities and bonds.”