Study released on FINRA’s top enforcement actions of 2021

On Behalf of | Mar 17, 2022 | FINRA Compliance

A law firm has released its annual analysis of enforcement actions taken by the Financial Industry Regulatory Authority during 2021, ThinkAdvisor reports.

The firm Eversheds Sutherland found that fines imposed by FINRA rose 60% from 2020 from $57 million to $91 million, the highest total since 2016.

This increase came despite the fact the number of disciplinary actions was down 6% from the previous year, from 602 to 569. The main reason for the spike in total fines was FINRA’s order that Robinhood Financial pay a record-setting $57 million in fines and $12.6 million in restitution for supervisory failures and harm suffered by millions of customers. Among other things, the firm was found to have negligently communicated false and misleading information to its customers relating to margin issues and failed to exercise due diligence before approving customers for options trading.

The study listed the top five FINRA enforcement issues for 2021 as measured by total fines assessed.

Heading the list for the sixth consecutive year was Anti-Money Laundering (AML) cases. FINRA reported 16 AML cases during the year, resulting in $4.6 million in fines.

The second category involved Unit Investment Trust cases, which saw the second most fines from FINRA last year and made Eversheds Sutherland’s list of top enforcement issues for the first time.

Rounding out the list of top FINRA enforcement issues were Suitability cases, Trade Reporting cases and Municipal Securities cases.

The study was compiled by reviewing FINRA’s monthly disciplinary reports, press releases and online database. Eversheds Sutherland said the results showed that FINRA focused much of its efforts on protecting, and returning money to, retail investors.

The attorneys at Lewitas Hyman fully understand the regulatory scrutiny financial professionals and their firms face from the various regulators that oversee the financial services industry. We have decades of experience representing clients with respect to examinations, investigations and enforcement proceedings initiated by the SEC, FINRA, state securities regulatory agencies and other self-regulatory organizations. If your firm is facing an investigation from a regulatory agency, please contact us at (312) 291-4600 or through our online contact form.

Share This