What gets Finra's head of enforcement out of bed in the morning?

Last year was a very active year for the Financial Industry Regulatory Authority Inc., with brokerage firms hit with a 63% increase in fines compared to the previous year, with $89 million in penalties.

But what does the man tasked with leading enforcement at Finra say are the priorities for him and his team in 2024? Sharing his insights in a blog post, Finra executive vice president and head of enforcement Bill St. Louis explains what drives the regulator’s primary aim of investor protection.

The enforcement team’s other key objectives include enhancing the transparency of Finra Enforcement to external stakeholders, increasing efficiency and reducing the time to complete cases, and improving collaboration across its regulatory operations.

Beyond this framework, specific focus is on protecting seniors and vulnerable investors from fraud and misconduct, cases that result in direct harm to investors, and robust treatment of repeat offenders who have a history of misconduct and violations.

Finra is also focusing on:

• “A best interest standard of conduct for broker-dealers and associated persons when they make a recommendation to a retail customer of any securities transaction or investment strategy involving securities, including recommendations of types of accounts.”

• Best execution of transactions to ensure that firms and employees conduct due diligence in finding the best market for buying and selling securities. This includes uncovering issues with routing practices.

• Targeted examinations, or ‘sweeps’ that are conducted by Finra’s regulatory operations team but may be referred to enforcement. Such sweeps resulted in a first settlement related to social media influencers and customer acquisition.

• Consolidated Audit Trail compliance. Those firms that have not adhered to CAT requirements may not face action although Finra has some cases where millions or even billions of reports are late or incorrect, with firms being aware of this.

“Advancing these objectives requires hard work by the talented team of professional investigators, analysts, data analysts, attorneys and operations staff at Finra Enforcement,” St. Louis wrote in his blog post. “We are confident that by diligently pursuing the objectives and keeping our mission of investor protection and market integrity top of mind, we can achieve our goals and collectively do what is right for investors and the market.