Annual Sutherland FINRA Study Shows Enforcement Actions on the Rise


Sutherland Asbill & Brennan LLP announced that it completed its annual Sutherland FINRA Sanction Study – a review of the disciplinary actions brought by the Financial Industry Regulatory Authority (FINRA) against broker-dealers and associated persons. Sutherland Partners Deborah G. Heilizer and Brian L. Rubin and Associate Andrew M. McCormick found that in 2010 FINRA reported a significant increase in the number of cases despite a slight decrease in the total amount of fines. Sutherland also identified the top enforcement issues for FINRA in 2010, as well as trends in enforcement cases.

The Results

Disciplinary Actions and Fines

FINRA’s disciplinary actions in 2010 grew from 1,158 to 1,310, an increase of more than 13%. This reverses the substantial slowdown in disciplinary actions filed between 2006 and 2008 (when there were 1,204, 1,177, and 1,073 disciplinary actions filed each year), and brings FINRA almost back to 2005 levels, when 1,412 disciplinary actions were filed. In 2010, FINRA fined firms and individuals approximately $45 million in 2010, falling just short of 2009’s $50 million in fines. Despite the increase in the number of matters, the total of the fines imposed by FINRA in 2010 is still significantly less than in 2005, 2006, and 2007 when the fines were $184 million, $111 million, and $77 million, respectively.

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