(Dow Jones) Five senior enforcement officials at the Financial Industry Regulatory Authority will be leaving as the regulator streamlines management.

At least four of the officials are veterans of Finra and one of its predecessor organizations, the National Association of Securities Dealers, according to a person familiar with the matter. They include Katherine Malfa, vice president and chief counsel of Finra's enforcement department with nearly 20 years of service, and Rory Flynn, vice president and chief litigation counsel, who joined Finra in 1997, according to people familiar with the matter.

The layoffs, which Finra told the officials about on Jan. 11, weren't based on performance issues, according to a person familiar with the matter. They also included Evan Rosser, vice president of strategic planning, and Michael Armelin, an assistant director in the enforcement department, according to persons familiar with the matter. The fifth enforcement official, from Finra's New York office, wasn't identified by the persons familiar with the matter.

Finra, the largest private-sector regulator for all securities firms doing business in the U.S., was created in 2007 after a merger between the National Association of Securities Dealers and the member regulation, enforcement and arbitration functions of the New York Stock Exchange.

A Finra spokeswoman declined to give details, but said in a statement that the regulator "continues to look at ways to streamline our management structure to be a more efficient, focused regulator." The enforcement staff's headcount or budget won't be reduced, she said.

Finra's finances were adversely affected by Wall Street's financial meltdown. Revenues that it receives from income assessments it imposes on members dropped 37% in 2009. In August, Finra proposed a rule change to the Securities and Exchange Commission that would revamp its fee-collection model so that its revenues depend less on a given year's brokerage income. In early 2009, Finra offered voluntary retirement to up to 300 of its staff, now totaling 2,800 people according to a 2008 annual report.

George Brunelle, a New York-based securities attorney who represents brokers in enforcement cases, said he's "shocked and disappointed" by the pending departure of Flynn, the chief litigation counsel. He's "exactly the type of person you should have in an enforcement operation--someone with a high sense of ethics," he said.

David Paulukaitis, former associate director of Finra's Atlanta district office, described the group as "well regarded." Paulukaitis, now managing director with Mainstay Capital Markets Consultants, Inc. in Atlanta, said Finra is losing "people who truly do have a lot of knowledge and experience and try to do it the right way."

"The question is, 'who is replacing them?'" he said.

Flynn declined to comment. Malfa, Rosser and Armelin didn't immediately return calls requesting their comment.

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