FINRA Considering Tougher Penalties Against Brokers and Firms

July 15, 2014 FINRA
The Wall Street Journal reported on June 19 [] that from 2009 to 2013, the Financial Industry Regulatory Authority (FINRA) took about double the amount of enforcement actions as its overseer, the Securities Exchange Commission (SEC) (7,032 to 3,500).  However, during the same time period it has doled out a mere fraction of the monetary sanctions the SEC has ($373 million to the SEC’s $14.6 billion).


As a result, FINRA is considering tougher penalties for misconduct after criticism from an SEC official that its sanctions are too lenient.


FINRA regulates more than 4,100 brokerage firms and 600,000-plus individual brokers.  The SEC, the top U.S. securities regulator, has about five times as many enforcement officials as FINRA.


Susan Axelrod, FINRA’s Executive Vice President of Regulatory Operations, said that FINRA spearheads efforts to deal with bad brokers.  She added that last year FINRA barred 429 brokers from the securities industry and suspended 670.  Ms. Axelrod said that in every case against a firm, FINRA looks to see if there are also grounds for taking action against individuals.


The lawyers at Gustafson Nicolai pc have extensive experience representing brokerage firms and their brokers in FINRA and SEC regulatory inquiries and enforcement actions.  Please call us with your matter today.
Uploaded by: Adam Nicolai, Esq., July 15, 2014.