FINRA imposed nearly double the fines on the industry in 2016, assessing $173.8 Million in fines as compared to $93.8 Million in 2015, according to its annual report. The increase in fines helped FINRA report over $57 Million in net income versus a $39 Million loss last year, even though operating income was lower in 2016. FINRA also ordered another $27.9 Million in restitution. FINRA uses fines collected for “capital expenditures and regulatory projects.”
OUR TAKE: Most of the financial regulators use their enforcement powers to collect funds to support their activities. Rather than encourage this financial incentive to bring cases, policy-makers should consider other alternatives such as third party compliance reviews or user fees.