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FINRA Took Significant Action in 2012
Published February 13, 2013
The Financial Industry Regulatory Authority (FINRA), the independent regulator of securities firms, accomplished much in 2012 in the areas of detecting fraud, developing cross-market surveillance and improving transparency in securities markets. The regulator also assessed $68 million in fines and ordered $34 million in restitution to customers during 2012, a record amount.
FINRA’s Office of Fraud Detection and Market Intelligence (OFDMI) conducts a surveillance program intended to detect fraud and insider trading. In 2012, the OFDMI referred 692 matters involving potential wrongdoing to the SEC or other law enforcement agencies. This included 260 referrals involving potential fraud and 347 referrals involving potential insider trading.
FINRA also brought several important disciplinary actions in 2012, and was sometimes the first regulator to address certain cases of ongoing fraud. The regulator took disciplinary action in 1,541 cases in 2012, a rise of 53 from the previous year. The actions were taken against firms and registered individuals, and included fines of over $68 million and restitution orders of $34 million to investors that were harmed. FINRA also barred 294 people from the securities industry, expelled 30 firms and suspended 549 brokers from associating with firms regulated by FINRA. The disciplinary actions included cases involving exchange-traded funds (ETFs), complex products, incorrect pricing and inadequate disclosure.
The regulator also conducted 1,846 routine examinations, 800 examinations of branch offices and 5,100 examinations for cause in 2012. Examinations were conducted in response to regulatory tips, investor complaints and terminations for cause. FINRA also began using new technology to conduct examinations more efficiently.
FINRA is a non-governmental regulatory body for securities firms operating in the United States. For more information, visit www.finra.org.
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