The Financial Industry Regulatory Authority hopes to conclude by the end of June the review of its enforcement program launched last July and "put out a public report," Robert Cook, FINRA's CEO, said Wednesday at the self-regulator's annual conference.
The review was spearheaded by FINRA enforcement chief, Bill St. Louis, as part of the FINRA Forward rulebook review initiative.
In July, Cook explained that St. Louis would work to develop meaningful, common-sense improvements to the enforcement program while two outside experts — Troy Paredes of Paredes Strategies, a former SEC commissioner; and Paul Eckert, a professor at William and Mary Law School — "consider governance, policies, processes, and communications, as well as how FINRA enforcement works with other FINRA departments and federal and state regulators."
Cook said in April in the one-year progress report on FINRA Forward that "FINRA has already introduced key procedural enhancements, such as introductory meetings for potential respondents, mandatory 90-day status updates, meetings at the conclusion of fact-finding where investigative findings are shared, and extended Wells [notice] response periods of 30 days."
Cook continued in the progress report: "FINRA plans to publish guidance on cooperation and remediation credit, update enforcement process information on our website, explore alternatives to FINRA Forward, on-the-record testimony in appropriate instances, and publish an enforcement manual (following updates to reflect changes to be made in response to the external review) to provide greater clarity and predictability."
Echoing comments made by Securities and Exchange Commission Chair Paul Atkins Tuesday at FINRA's event that "regulation through enforcement is over at the SEC," rules "shouldn't be made up in the enforcement process," Cook said Wednesday. "That should not be when people are learning what the rules of the road are. If the rules aren't clear, we should write new rules but we should be enforcing standards that people had fair notice of in advance."
FINRA CEO Robert Cook. Courtesy photo
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