The problem, however, is that as some broker-dealers continued to self-report the failure to offer mutual fund fee waivers, FINRA discovered the same problem at other firms during examinations.
As a result, in May 2016, Finra launched a targeted exam, known as a sweep, to conduct a review of a group of firms that had not self-reported the issue.
Finra and other regulators conduct sweeps to gather information on emerging issues and use this information to focus examinations and pinpoint an appropriate regulatory response, as needed. Finra sanctioned 11 firms through the sweep and reached settlements with another 35 firms, most of which self-reported prior to the sweep, according to Finra.
Of the 56 firms sanctioned, 43 were not fined because of their cooperation.