WASHINGTON, Oct. 4, 2016 /PRNewswire/ -- Sutherland Asbill & Brennan LLP announces its semiannual study of disciplinary actions brought by the Financial Industry Regulatory Authority (FINRA). Co-author and Sutherland Partner Brian Rubin discusses what the findings for the first half of 2016 mean for broker-dealers and for the financial services industry. Rubin is available for interview or you are welcome to quote from the following remarks:
Q: What's the biggest take-away from FINRA's disciplinary actions so far in 2016?
BR: If FINRA keeps on track, it will set a new record for fines it assesses against firms and individuals. During the first half of 2016, FINRA reported fining broker-dealers and associated persons $79.4 million, up from $37.5 million during the first half of 2015 and $94 million for the entire year. If fines continue at this rate, year-end fines would total approximately $159 million, a 69% increase over the total fines reported by FINRA in 2015, and a 19% increase from the record set in 2014, when FINRA assessed $134 million in fines.
Q: Any other noteworthy issues?
BR: During the first six months of 2016, FINRA reported 11 "supersized" fines of $1 million or more, four of which were "ginormous" fines of $5 million or more. FINRA also ordered $13.8 million in restitution during this time period. If restitution continues at a similar pace, the year-end total would be nearly $28 million, representing a 71% decrease from the total restitution reported by FINRA in 2015 ($96 million).
Q: What categories generated the heftiest fines?
BR: The top five categories for fines were variable annuities, due diligence, anti-money laundering (AML), trade reporting and notes/bonds.
Q: What should broker-dealers and individuals focus on going forward?
BR: These statistics bear out what we've been hearing from FINRA staff: We are in a whole new world. Firms and individuals will need to adjust their mindsets regarding fine levels in disciplinary cases. To try to avoid being the subject of one of these actions, firms should consider focusing on "nuts and bolts" issues like marketing and suitability of products, AML, trade reporting, and supervisory policies and procedures.
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SOURCE Sutherland Asbill & Brennan LLP