FINRA's sanctions in 2009: a sign of things to come?


Purpose – The purpose of the paper is to summarize a review of all of FINRA's 2009 notices and releases to understand the areas in which FINRA has focused and to try to predict where FINRA may be going in the coming year.

Design/methodology/approach – The paper summarizes fines, disciplinary actions, and top enforcement issues; analyzes trends; and draws conclusions.

Findings – FINRA reported modest increases in fines and disciplinary actions compared to 2008; however, FINRA was less active than in 2005, 2006 and 2007. The types of cases that generated the most fines, in descending order, were mutual funds, suitability, variable products, licensing, and advertising. One may see more advertising, money laundering, an electronic communications cases in the near future. Given the recent financial crisis and market scandals, and resulting pressure on the regulators, it is perhaps more likely that FINRA's enforcement activity and fines will increase over the next few years, not decrease.

Originality/value – The paper provides expert guidance from experienced financial services lawyers.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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