Each month, FINRA’s disciplinary actions highlight the areas where firms most often run into trouble — and September was no exception. The latest round of fines and sanctions shows familiar themes: weak supervision, private placement issues, recordkeeping failures, and lapses in Reg BI oversight.

For compliance teams, these actions are a reminder of where regulators are focusing and what steps firms should be taking to prevent similar findings.

1. Supervision & Written Supervisory Procedures

What Went Wrong: Firms were repeatedly fined for failing to establish and enforce supervisory systems that reasonably ensured compliance with regulations. In many cases, written supervisory procedures (WSPs) were either too vague or not followed in practice, leading to improper trading activity, missed notifications, or failures in monitoring complex products.

Compliance Takeaway:

  • Regularly review and update WSPs to ensure they are specific, actionable, and reflect current regulatory expectations.
  • Conduct supervisory testing to confirm procedures are not just on paper but actively enforced.
  • Provide managers with training to identify red flags early, especially in high-risk areas like trading strategies and customer communications.

2. Private Placements & General Solicitation

What Went Wrong: Firms allowed representatives to cold-call or solicit investors for private placements without establishing pre-existing substantive relationships. Others failed to file private placement documents on time, with some filings overdue by months or even years.

Compliance Takeaway:

  • Define what constitutes a “pre-existing substantive relationship” in your policies and train reps accordingly.
  • Require pre-approval for outreach lists and marketing efforts tied to private offerings.
  • Maintain a calendar or automated alerts to track Reg D filing deadlines and ensure timely submissions.

3. Books, Records & Communications

What Went Wrong: Firms failed to preserve required business communications, especially electronic messages on personal or unmonitored devices. Others issued retail communications that were misleading or incomplete, particularly around emerging products such as crypto assets.

Compliance Takeaway:

  • Enforce strict policies on approved communication channels and monitor for personal device use.
  • Ensure archiving vendors are properly capturing and retaining all electronic communications.
  • Review marketing and retail communications for accuracy, balance, and compliance with FINRA standards — especially when new products are involved.

4. Sales Practices & Suitability

What Went Wrong: Representatives engaged in unsuitable or high-risk trading activity that generated losses for customers. Some firms failed to detect or prevent short-term trading of products that were designed to be long-term holdings.

Compliance Takeaway:

  • Strengthen suitability reviews for products that carry liquidity or complexity risks.
  • Monitor trading patterns for red flags such as excessive turnover, short-term gains, or account churning.
  • Provide targeted training to representatives on the risks of specific product categories and suitability standards.

5. Reg BI & Net Capital Requirements

What Went Wrong: Several firms were fined for failing to implement policies reasonably designed to comply with Regulation Best Interest (Reg BI). Others submitted inaccurate net capital computations or failed to provide timely financial notifications to regulators.

Compliance Takeaway:

  • Revisit Reg BI policies to ensure they clearly define how best-interest obligations are met in practice.
  • Incorporate Reg BI testing into branch audits or supervisory reviews.
  • Regularly reconcile financial statements and ensure accurate net capital reporting to avoid regulatory deficiencies.

Takeaway for Firms

FINRA’s latest disciplinary actions underscore a consistent message: regulators are looking for firms to move beyond policies on paper and demonstrate real, enforceable compliance in practice. Weak supervision, poor recordkeeping, and gaps in Reg BI oversight continue to draw scrutiny, and firms that fail to act risk costly fines and reputational damage. By proactively tightening supervisory systems, monitoring high-risk areas, and embedding compliance into day-to-day operations, firms can stay ahead of regulatory expectations and protect both their business and their clients.