Senator Elizabeth Warren is pressing the nation’s broker-dealer regulator, Finra, on its claim that success in kicking bad actors out of the industry explains why enforcement numbers have plummeted in recent years.
Fines levied by the Financial Industry Regulatory Authority have dwindled to half their recent levels, and the number of enforcement actions last year was the lowest in history, Bloomberg News reported in June. The regulator attributed the decline to improved rules and strategies to weed out repeat offenders.
“The new report appears to indicate that the decline in enforcement is part of a deliberate deregulatory effort,” Warren said in a letter to Finra, a private self-regulatory organization that’s funded by its members.
The Massachusetts Democrat said the enforcement slowdown coincided with the so-called Finra 360 program, launched seven years ago to make the regulator more “effective and efficient.”
That effort saw the integration of two different enforcement divisions at the markets watchdog. It was intended to streamline investigations and information sharing and “enable the organization to vigorously and fairly enforce applicable rules,” Finra spokesperson Ray Pellecchia said in an email.
Warren asked Finra to explain what policy changes were made as a result of that initiative.
“Any suggestion that FINRA360 had the effect of reducing the number of enforcement actions is just dead wrong,” Pellecchia said, adding that such allegations would carry more weight if the industry wasn’t continuing to blast Finra’s enforcement moves.
Industry executives have complained the regulators’ enforcement function “is inflicting unnecessary and excessive costs and uncertainty,” Ann Wagner, a Missouri Republican and senior member of the House Financial Services Committee, said at a December hearing.
Finra barred 3,640 individuals and expelled 130 firms from its membership between 2014 and 2023, according to Pellecchia. Those expulsions included high-risk firms as well as associated individuals who had been the subject of multiple disciplinary actions, moves that would help explain the decline in enforcement actions, Pellecchia said.
“Other high-risk firms withdrew from our membership following considerable regulatory attention,” Pellecchia said. During that period, the regulator’s enforcement actions resulted in $377.9 million ordered to be returned to harmed investors, he said.
Britt is named CFO of Wipfli, a $600 million accounting firm that audits two NFL franchises
The acquisition pairs Zephyr's 21,000-product separately managed account database with Y Charts' newly launched AI agent assistant for investment research.
The war for talent continues in the Sunshine State with as Truist and RayJay teams managing a collective $1 billion in client assets defect to other firms.
Americans now estimate they need $1.2 million to retire comfortably, but rising costs and debt are making that goal increasingly difficult to reach.
Crewe Advisors' Ryan Halliday and Accelerated Wealth Partners' Eric Amar suggest mega RIA's readiness to integrate — not just scale — will determine whether an IPO exit actually works.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
