Fines imposed by the Financial Industry Regulatory Authority for 2014 are on track to greatly exceed the fines reported by the regulator last year, according to an analysis of Finra actions by Sutherland, Asbill and Brennan LLP, a Washington, D.C., law firm.
During the first half of 2014, Finra reported $42.4 million in fines. During the first half of 2013, Finra reported fining broker-dealers and associated persons $23 million, and $57 million for the entire year.
According to Sutherland, if fines in 2014 continue at the current rate to an estimated $85 million, this year will represent a 49 percent increase from the total fines reported in 2013. That figure would represent the highest amount of fines reported by Finra since the financial crisis and the most fines reported since 2006 ($111 million).
Five “supersized” fines of $1 million or more, totaling $20.4 million, have been published in Finra’s monthly disciplinary reports through June 2014. One of these cases was in February when Brown Brothers Harriman agreed to pay an $8 million fine for alleged anti-money laundering compliance failures involving penny stock transactions.
Finra reported a 7 percent decline in disciplinary actions to 558 during the first six months of 2014, from 597 for the same period last year.
The percentage of cases that involved firms, as opposed to individuals, was very similar to that of the first six months of 2013 -- 36 percent in 2014 compared with 38 percent in 2013.
Administrative and technical issues have resulted in the most cases so far this year. There have been 61 cases regarding books and records resulting in $13.7 million in fines, and 92 cases of trade reporting violations resulting in $6.7 million in fines.