Sutherland Asbill & Brennan LLP has completed its annual FINRA Sanctions Survey, a review of the disciplinary actions reported by the Financial Industry Regulatory Authority (FINRA). By reviewing FINRA’s notices and releases, Sutherland Partners Deborah G. Heilizer and Brian L. Rubin and Associate Andrew M. McCormick found that in 2011 FINRA reported a significant increase in the number of disciplinary actions filed and the total fines imposed. These increases followed a substantial increase in the number of cases reported in 2010. Sutherland also identified the top enforcement issues for FINRA in 2011, as well as emerging trends.
Fines and Disciplinary Actions
FINRA reported filing 1,488 disciplinary actions in 2011, a considerable increase from the 1,310 cases the regulator initiated in 2010.1 2011 was the third straight year of growth in the number of FINRA disciplinary actions. While the growth in 2009 was relatively modest (an 8% increase), FINRA posted double-digit increases for both 2010 and 2011, approximately 13% each year. The number of individualbarred by FINRA also increased significantly—from 288 in 2010 to 329 in 2011, an increase of more th14%. Similarly, the 97 formal complaints filed by FINRA to the Office of Hearing Officers in 2011 nmatched the 98 filed in 2005 and rose for the fourth straight year after significant slowdowns in 2006 and 2007. (Prior to the filing of a formal complaint, an enforcement action can be settled through a Letter of Acceptance, Waiver and Consent.)
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