Finra President and CEO Robert Cook vowed Monday the regulator would get tougher on recidivist broker-dealers and brokerages.
“There is a sense of urgency,” Cook said.
Among the measures, he said, are proposed sanction guidelines for more severe sanctions when an individual's disciplinary history includes additional types of past misconduct and to allow hearing panels to restrict activities of firms and individuals when a disciplinary matter is on appeal.
To aid detection of high-risk brokers, Cook said, Finra is beefing up analytics so staffers can know where a suspect broker works and the degree to which his or her co-workers have committed misconduct.
He said customer complaints are not the only way Finra discovers bad-actor brokers, noting trading history and supervisory programs are looked at as well.
The Finra chief’s remarks came during and after a speech to Georgetown University’s McDonough School of Business Center for Financial Markets and Policy in Washington D.C.
Cook predicted Finra will be able to double its exams of high-risk brokers in 2017 with a new, central high-risk exam unit that will work closely with district office examiners and a team of enforcement lawyers who aim to quickly bring disciplinary actions if misconduct is identified.
The Finra chief called upon brokerages to do their part to bring greater protection to retail investors from fraudulent activities.
He said firms should consider tighter supervision of individuals who have a history of customer complaints or disciplinary actions on sale practice abuses and other consumer harm.
Cook added that keeping the public safe from broker misconduct also requires constant focus by other regulators, particularly state regulators.
In emphasizing the need for the heightened attack on misconduct, Cook said, “A few bad actors can not only devastate the investors they target, but also threaten confidence in the wider financial system.”