Call Now For a Free Consultation:
(614) 532-4576
Nationwide Representation

FINRA Disciplinary Actions Up in 2010

If it seems like FINRA has been filing more enforcement actions over the past twelve months or so, it’s because it has. According to a study released Monday, the self-regulatory organization filed 152 more disciplinary actions in 2010 than in 2009 (“Finra's Disciplinary Cases Rose 13% in '10, Study Says,” Wall Street Journal, Feb. 28, 2010). The 13 percent increase has been, in many industry professionals’ eyes, the direct result of increased public pressure on regulators to crack down on securities fraud.

"Regulators felt the pressure after the [2008] financial collapse to beef up their enforcement efforts," said James Fanto, a professor at Brooklyn Law School in New York, in the article. "They've all been shamed into being more aggressive.”

In 2010, FINRA brought 1,310 disciplinary action cases compared to 1,158 in 2009. And, if recent events are any indication, that increase may continue through 2011. Already this year, a number of brokerage firms have announced the receipt of FINRA Wells notices, including E*Trade and National Securities. (A Wells notice is the notification that a regulator intends to bring an enforcement action against a company or individual.)

But, it’s not just the number of actions filed by FINRA that is important. Disciplinary actions also provide an indicator of where regulators are placing their focus. As David Lipton, a law professor at Catholic University of America in Washington, D.C., told the WSJ: “…disciplinary actions reflect what regulators are penalizing.”

As reported in the article, cases against brokers and firms for advertising issues, including misrepresentations and omissions, generated the most fines ($4.75 million) in 2010. Actions against firms and brokers for improper communications related to credit default sweeps, electronic communications violations, and suitability violations were also prevalent last year, and generated $4.5 million, $4 million, and $3.8 million in fines, respectively.

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

Share This Story
If you found the information provided by this article useful, consider sharing to your social media channels to help others in their search for reliable resources.
Consult with Our Legal Team
There is never a cost associated with a consultation
Atlanta Office

945 East Paces Ferry Road, Suite 2275
Atlanta, GA 30326
Columbus Office

305 W. Nationwide Blvd
Columbus, OH 43215
Meyer Wilson
New Orleans Office

900 Camp Street 
Suite 337
New Orleans, LA 70130
Los Angeles Office

2029 Century Park East,
Suite 400N
Los Angeles, CA 90067
Cleveland Office

4781 Richmond Rd.
Suite 400
Warrensville Heights, OH 44128
Bloomfield Hills Office

41000 Woodward Ave.,
Suite 350
Bloomfield Hills, MI 48304
Quick Links
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients of content from this site, clients or otherwise, should act or refrain from acting on the basis of any content included in the site without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. Read More
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter.
Read More
chevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram