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Saturday, June 8, 2013

FINRA Disciplinary Update


The following update validates the need for advocacy network services. All investors and consumers need an independent non-biased watchdog as it is clearly becoming more evident that financial service providers do not have their client’s best interests in mind.

FINRA Fines Up 15% in 2012

The Financial Industry Regulatory Authority (FINRA) last year reported filing 1541 disciplinary actions, a 3.6% rise over the prior year. It also put more bite into its actions by doling out $78.2 million in fines, a roughly 15% jump from 2011. It marked the fourth consecutive year of increased disciplinary actions by the brokerage industry regulator and the second straight year of higher fine totals.

The top enforcement issues, as measured by total fines assessed, related to suitability, due diligence, research report and research analyst cases, advertising and exchange-traded funds.

The uptick in suitability cases owes mainly to the $7.5 million in fines assessed in four ETF cases, as well as cases involving complex products such as reverse convertible notes and unit investment trusts. Sutherland Asbill & Brennan said it expects this to be a priority area for FINRA due to the increasing number of complicated financial products entering the market.

Regarding ETF’s, the law firm said FINRA put the clamps down on cases dealing with leveraged and inverse ETF’s that the agency considers unsuitable for conservative investors and were sold without sufficient due diligence review.
Karl Schilling
the Advocacy Network
www.theadvocacynet.com
321-250-1445 O
321-947-3220 C
Skype: karl.schilling5