Finra fines up, but restitutions plummet in first half of 2018

Financial Industry Regulation Authority Inc. fine amounts increased slightly in the first half of 2018, while restitutions plummeted from last year, according to a new study.

According to the law firm of Eversheds Sutherland, which tracks Finra enforcement actions, Finra ordered fines of $25.9 million in the first half of 2018, a $2.4 million hike from the $23.5 million it levied in 2017. This was largely due to a number of “supersized” fines, or fines of $1 million or more. Meanwhile, only $4.9 million in restitutions were ordered during the first half of 2018, a significant drop from the $38.1 million that were ordered from the same period in 2017.

(More: Finra restitutions more than doubled in 2017, disciplinary actions study finds)

The five “supersized” fines in the first six months of 2018 amounted to $13.9 million, or a little more than half of the total fines in that period. In the first six months of 2017, there were only three “supersized” fines that added up to $6.4 million.

“In terms of the supersized fines, it could be a function of the conduct in the cases is worse, or it could be a function that the bar has been raised over the past couple years,” said Brian L. Rubin, head of Eversheds Sutherland’s Washington, D.C. litigation practice group.

Despite the increase in fine amounts, the number of disciplinary actions from Finra has declined in 2018. During the first half of this year, Finra reported 342 disciplinary actions, down 117 from 459 disciplinary actions in 2017.

Related Topics: Financial Industry Regulatory Authority