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FINRA Imposed $80 Million More in Fines in 2016

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.

http://www.finra.org/sites/default/files/2016_AFR.pdf

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