FINRA cracked down hard last year on firms that did not do right by their customers.
In 2015, the regulator slammed offenders with $46.3 million in sanctions for suitability-related infractions, nearly six times the $7.9 million it imposed in 2014, according to a recent analysis by law firm Sutherland Asbill & Brennan.
The sanctions for suitability violations included $28 million in restitution and $18.3 million in fines, up from $2.3 million and $5.6 million, respectively, the year before.
One of the significant suitability cases involved Barclays Capital, which was fined $3.75 million and ordered to pay $10 million in restitution for allegedly failing to maintain a supervisory system regarding the suitability of mutual fund sales and exchanges as well as the application of breakpoint discounts.
The number of disciplinary actions for suitability offenses, however, was flat. The regulator reported 76 suitability cases, virtually unchanged from the 75 cases it brought in 2014.
In addition to suitability violations, the regulator went after firms and individuals for trade reporting, anti-money laundering, advertising and form U4 and U5 abuses, which Sutherland identified as the top enforcement issues as measured by total fines assessed.
Overall, FINRA filed 1,462 disciplinary actions, up nearly 5%. It marked the first time since 2012 that the regulator reported an increase in the number of cases filed. The disciplinary actions resulted in approximately $94 million in fines and a record $96 million in restitution. Combined, the sanctions jumped 14% from 2014.
"This was FINRA's biggest year since the financial crisis and firms and their representatives should take notice," Brian Rubin, a Sutherland partner, said in a statement. "The amount of fines and restitution ordered by FINRA has increased significantly during the last two years and the regulator does not appear to be slowing down."
- 1 in 3 FINRA Awards Went Unpaid to Aggrieved Investors, PIABA Finds
- Barclays Capital to Pay $13.8 Million for Unsuitable Mutual Fund Transactions
- Advisor Sues SunTrust for Defamation
- Ex-J.P. Morgan Chase Broker Barred
Like BIC’s Facebook page here.
Follow BIC on Twitter at @BIConline.
Join BIC’s LinkedIn Group here.
Register or login for access to this item and much more
All Bank Investment Consultant content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access