By Mathew Schwartz
FINRA, the largest independent regulator for securities firms doing business in the United States, has significantly increased enforcement actions and fines since the Financial Crisis in 2008. FINRA levied $68 million in fines in 1,541 cases against firms and registered individuals in 2012, up from $28 million in fines in 1,073 cases in 2008. That is a 59-percent increase in fines and a 30-percent increase in actions over this four-year period. The good news for firms: investor-related litigation has dropped from its peak in 2009, after the financial crisis. In 2009, 7,137 arbitration claims were filed with FINRA Dispute Resolution, compared to 4,299 in 2012. This is a 40-percent decrease over a three-year period. We anticipate these litigation trends will continue until the stock market shows reduced returns or there is another significant economic slowdown.
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