Financial Industry Regulatory Authority (Finra) fines and disciplinary actions for 2012 are on track to significantly outpace those for 2011, according to a midyear review from the law firm Sutherland Asbill & Brennan LLP, which tracks Finra's actions through its financial services practice.
The review, which was conducted by Sutherland partners Deborah Heilizer and Brian Rubin, found that Finra ordered broker-dealers and associated persons to pay $39.4 million in fines during the year's first half. If the current pace is maintained, total fines would jump 15% over last year's total, Rubin said.
Sutherland also found that 609 cases were reported by Finra during this year's first half, a pace that would exceed last year's total disciplinary actions by almost 9%.
The report also indicates that Finra has been more aggressive in ordering "supersized" fines (fines of at least $1 million). During the first half of the year, it ordered seven such fines totaling $24 million. For all of 2011, "supersized" fines totaled $35 million.
Finra's projected overall increase in fines and disciplinary actions would represent the fourth straight year of growth. The top five enforcement issues for Finra during the first half of 2012--in terms of fines imposed--have been research analyst communications, suitability, unit investment trusts, markups and/or markdowns, and municipal securities.
Finra's cases for the first half of 2012 suggest that the authority continues to focus on industry practices and particular product areas.
"So far, 2012 is turning out to be a year of significant growth in Finra's fines and disciplinary actions," Heilizer said. "This year, Finra appears to be leaning toward product-specific cases. If these trends hold, 2012 will turn out to be a solid year for Finra."