FINRA stepped up its game last year, issuing more disciplinary actions and making a number of investments to increase the scope of its regulatory oversight.
FINRA brought a total of 1,541 disciplinary actions, levied more than
The regulator reported it had expelled 30 firms, barred 294 individuals and suspended another 549 compared to 21 firms expelled, 329 individuals barred and 475 individuals suspended in 2011. Meanwhile, the number of investor complaints received dropped to 2,785, which was just over half of the peak of 5,405 complaints in 2008.
“In 2012, we enhanced our regulatory programs to more fully protect investors and further assure the public that America’s financial markets are fairly regulated,” FINRA CEO
FINRA reported that they had been working to streamline their enforcement operations through a targeted, risk-based approach. In October, FINRA launched the first series of pilots of the new risk-based exam platform. As part of the program, staff is able to red flag offices and firms that are dealing in more complex business models and products. The regulator made a total of 1,846 routine examinations, more than 800 branch office examinations (up modestly from below 800 last year) and 5,100 cause examinations that resulted from customer complaints or regulatory tips.
“The pilot has given us valuable insight, and as a next step we are extending the pilot to include firms that have more complex business models and products,” Ketchum wrote. “We expect to begin using the platform for all new exams by the end of this year.”
The regulator also said it was putting in a bid to build and maintain the consolidated audit trial, a system recently approved by the
PLENTY OF CAPITAL
Financially, FINRA bounced back from a series of bad years. The regulator’s equity earnings and other investments pulled in
“2012 was a solid year for FINRA financially, as the fee increases implemented during the year and the cost savings across technology and back-office functions are reflected in our improved results over the prior year,” FINRA wrote in its release. “Furthermore, our modernized fee structure and continued cost savings initiatives are expected to better position FINRA financially over the course of the next two years.”
FINRA’s revenue wasn’t the only one on the rise. Ketchum’s total compensation rose by
“Our expenses are largely driven by employee-related costs, as we seek to attract, develop and retain a diverse group of talented staff, particularly in the highly specialized areas of regulation and technology, to enable FINRA to carry out its regulatory mandate in today’s ever-changing markets,” FINRA reported.
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