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FINRA's Top 5 Fine Categories in 2022

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Related: FINRA’s Top 5 Fine Categories in 2021

Fines reported by the Financial Industry Regulatory Authority in 2022 decreased to $45 million from $103 million in 2021, a 56% drop, according to just-released data from the law firm Eversheds Sutherland.

However, fines in 2021 included a single, record-setting $57 million fine against one firm, the law firm reports.

(That firm was Robinhood, which FINRA said had caused “widespread and significant harm” to millions of customers. The online brokerage responded that it was boosting its platform stability and compliance resources.)

“Without that one large fine, FINRA’s fines in 2021 would have been $46 million, which would have resulted in only a 2% decrease from 2021 to 2022,” partners Brian Rubin and Adam Pollet found.

In contrast, the number of cases with very large fines increased in 2022.

The two attorneys compiled their report by studying FINRA’s monthly disciplinary reports, press releases and online database.

In 2022, FINRA brought 14 cases dealing with off-channel communications, resulting in fines totaling $2.1 million. In the largest case, FINRA fined H.C. Wainwright & Co. $1.5 million.

“These cases pale in comparison” to the cases that the Securities and Exchange Commission has brought, which resulted in monetary penalties ranging from $10 million to $125 million, the two attorneys state. “We expect FINRA to ramp up the number of cases it brings in this area,” Rubin said.

“While it is doubtful that FINRA will bring the ‘eye-popping’ cases that we have seen from the SEC, it is likely that FINRA will bring significant cases where reps have communicated about securities business matters on their personal devices, using text messages, WhatsApp, Signal, WeChat, and other applications, as well as personal email accounts,” the attorneys wrote. “The next issue the securities regulators may be addressing is how firms surveil these messages when they retain them.”

The number of cases reported by FINRA decreased last year.

FINRA reported 463 disciplinary actions in 2022, a 13% decrease from the 534 disciplinary actions in 2021 and a 17% decrease from the 560 disciplinary actions in 2020, according to the report.

Read the galley to see FINRA’s top 5 enforcement issues for 2022, measured by total fines assessed, as compiled by Eversheds Sutherland.