Finra, the brokerage industry’s self-funded regulator, has imposed less in total fines in the first half of 2015 than in the same period last year, according to data cited by ThinkAdvisor. Still, at $37.5 million, the figure is the second-highest total since 2008, the publication writes — and the end of the year may well see an increase in activity.
If the regulator proceeds at the same pace, total fines for 2015 are projected to reach $75 million, compared to $135 million imposed last year, data from the law firm Sutherland Asbill & Brennan shows. But the regulator is likely to step up the pace toward the end of the year, notes Brian Rubin, head of Sutherland’s Washington litigation group. Furthermore, there’s been almost no letup in the number of disciplinary actions. Finra reported 553 actions during the first half of 2015, compared to 558 actions in the first half of 2014, according to Sutherland’s analysis as related by the publication.
ThinkAdvisor reports that inappropriate-trade reporting was a big focus for Finra fines this year, bringing in $7.6 million from 72 cases — followed by short selling, which amounted to $4.2 million across 21 cases. The publication points out that as far as individual companies, LPL Financial leads the pack this year, getting fined $10 million in the first half of 2015 for alleged “widespread supervisory failures” and ordered to pay an additional $1.7 million in restitution to clients.
Anti-money-laundering remains a big priority for the regulator, according to Rubin. While fines were $13.2 million by the end of last year, they were only $2.4 million in the first six months of 2015 — but they are still significantly higher than the $1.8 million total levied in 2008, WealthManagement.com writes. Rubin also expects increased scrutiny of L-Share variable annuities and cyber-security issues, and suggests that firms that want to stay out of the regulator’s crosshairs need to focus on the “nuts-and-bolts” issues of disclosure, suitability, anti-money-laundering issues and trade execution.