FINRA recently provided its statistical results and highlights for 2011. Among the more significant items that FINRA noted, FINRA has brought, to date, 1,411 enforcement actions and levied fines totaling more than $63 million. FINRA also expelled 17 firms, barred 317 individuals and suspended 432 registered representatives.
FINRA’s Office of Fraud Detection and Market Intelligence (OFDMI) also referred more than 600 matters involving potential fraudulent conduct to federal and state regulators and law enforcement. Of significance with these statistics is that OFDMI used real-time surveillance techniques to uncover potential fraud and insider trading.
Finally, FINRA has enhanced its securities firm examination program to detect potential fraud, and increased its staff in FINRA district offices who will focus on member firms. FINRA also announced that it is focusing in greater detail on branch office exams. In short, FINRA has focused on areas posing the greatest risk to investors, designating those issues as “urgent”.
So what does this all mean for member firms and their registered representatives. Like the SEC and CFTC, FINRA is working its way out of criticisms that it sustained in the fallout from the financial crisis of 2008, and has ramped up its oversight of firms and representatives as a means to that end. FINRA’s comments regarding 2011 all point to the fact that member firms must be even more diligent than ever when it comes to supervision and compliance. As the year winds down, now is as good a time as any to revisit compliance policies and procedures to ensure they remain current and are followed in a uniform manner. Otherwise, you may be a FINRA statistic next year.