A Shift in Regulatory Strategy
The Financial Industry Regulatory Authority (FINRA) is signaling a decisive shift in enforcement priorities. While broad corporate penalties remain a tool in the regulator’s arsenal, FINRA is increasingly focused on holding individual brokers, registered representatives, and executives personally accountable for misconduct.
Recent disciplinary actions show a clear intent to target individuals for breaches of conduct, even as broader industry rhetoric emphasizes “reducing the regulatory burden” and encouraging innovation.
FINRA Targets CE Exam Misconduct
In one recent case, FINRA fined an independent broker $5,000 for misrepresenting his continuing education (CE) requirements and misrepresenting that he had personally completed the mandated credits.
This is not an isolated incident. In the past year, FINRA has disciplined multiple individuals for violations including:
- Sharing confidential exam content with other candidates
- Concealing poor conduct via off-channel communications
- Misrepresenting client account activity
The U.S. Department of Justice has also updated its white-collar enforcement policies to prioritize prosecution of individual wrongdoers, rewarding firms that self-disclose and cooperate.
The clear message: personal misconduct will be met with swift and high-impact consequences.
Why This Matters for Firms
For firms, this shift underscores the need for robust broker-dealer compliance programs, proactive AML compliance measures, and comprehensive communications surveillance to detect and address misconduct before it escalates. Weak oversight not only risks reputational damage but can also lead to severe individual penalties for employees and executives.
FINIQ Broker-Dealer Compliance Services: Protecting Firms and Professionals
FINIQ’s Compliance Services provide investment bankers, broker-dealers, and placement agents with the regulatory infrastructure to operate confidently and competitively in today’s market.
We deliver a comprehensive, technology-enabled white-label broker-dealer compliance platform that includes:
- Broker-Dealer Sponsorship and Licensing Support for Series 7, Series 82, and other FINRA registration requirements, combined with white-label compliance frameworks tailored to your business model, including Written Supervisory Procedures (WSPs), AML compliance programs, and advertising review under FINRA Rule 2210.
- Regulatory Filings, Audit Preparation, and Due Diligence including Form BD, Form U4/U5, continuing membership applications, preparation for FINRA and SEC compliance exams, and deal review to meet FINRA private placement filing requirements and enhance investor protection.
- Communications Surveillance and Compliance Oversight for email, social media, and off-channel communications, ensuring adherence to FINRA and SEC regulations while reducing misconduct risk.
- Business Growth Resources with access to new deal flow from FINIQ’s active capital markets pipeline, and a national network of 130+ financial professionals for collaborative transactions, co-placement opportunities, and shared market intelligence.
FINIQ offers more than compliance oversight. We give you the infrastructure to grow revenue while staying ahead of FINRA and SEC compliance requirements.
LEARN MORE ABOUT FINIQ Compliance Services
Partner with FINIQ
FINIQ helps you strengthen broker-dealer compliance, grow your network, and access quality deal flow in today’s accountability-driven regulatory environment.
Reference
Global Relay – https://www.globalrelay.com/resources/thought-leadership/fca-and-finra-shift-attention-to-individual-accountability-with-misconduct-fines/
