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Finra Disciplinary Fines Up in 2018

A client alert from law firm Eversheds Sutherland reviewed enforcement trends at Finra over the last year. Finra continues to bring share class cases, specifically targeting firms for failing to provide sales charge waivers for retirement plans and charitable organizations. In 2018, Finra brought six actions against firms that failed to provide sales charge waivers when applicable. Among other targets were firms who failed to commit sufficient resources to their regulatory obligations. The Eversheds Sutherland report said two such matters in 2018 resulted in sanctions of $10.8 million. Overall fines reported by Finra in 2018 increased slightly to $68 million from $65 million in 2017, although that figure was down significantly from the record-setting fines of $176 million in 2016. “Despite this reduction, fines have increased by 143% in the ten years since 2008, when Finra assessed fines of $28 million,” the report said. Finra assessed 13 fines of $1 million or more in 2017, and five fines of $5 million or more in 2018. In 2017, Finra assessed 15 fines of $1 million or more and two fines of $5 million or more.

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