Eversheds Sutherland has released its annual analysis of FINRA disciplinary actions, revealing significant shifts in enforcement patterns during 2024. While case numbers increased substantially, total fines decreased compared to the previous year.
Top Enforcement Issues in 2024
Based on total fines assessed, the top five enforcement issues were:
- Trade Reporting
- Spoofing
- Options Trading *
- Technological Issues *
- Fingerprinting Non-Registered Persons *
This represents a notable change from 2023, when Spoofing, Trade Reporting, Anti-Money Laundering/Bank Security Act, Regulation Best Interest, and Suitability topped the list.
* This enforcement issue is the first time it has appeared on Eversheds Sutherland’s Top Enforcement issues list.
Key Findings from the 2024 FINRA Sanctions Study
Rising Enforcement Activity
After eight years of declining cases, FINRA has significantly ramped up its enforcement efforts. The number of disciplinary actions jumped to 552 in 2024, marking a substantial 22% increase from the 453 cases reported in 2023.
Shifting Monetary Penalties
While enforcement actions increased, the financial penalties present a more nuanced picture:
- Total fines decreased by 35% to $59 million (down from $89 million in 2023)
- Restitution orders soared by 207% to $23 million (up from $7.5 million)
- Overall monetary sanctions (combining fines, restitution, and disgorgement) totaled $87 million, representing a 14% decrease from the $101 million assessed in 2023
“Supersized” and “Mega” Fines
The trend of significant individual penalties continues, though with some moderation:
- FINRA imposed 15 “supersized” fines of $1 million or more, slightly up from 14 such fines in 2023
- Only one “mega” fine of $5 million or more was assessed, compared to four in the previous year
Compliance Implications
Enhanced Regulatory Focus
The significant increase in disciplinary actions suggests FINRA is intensifying its scrutiny of member firms. This heightened regulatory focus necessitates that firms strengthen their compliance frameworks accordingly.
Investor Compensation Priority
The dramatic rise in restitution orders demonstrates FINRA’s commitment to compensating investors who have suffered harm. This shift emphasizes the importance of prevention-focused compliance programs that prioritize investor protection.
Looking Ahead
For compliance professionals, the 2024 data present clear action items. The significant increase in cases coupled with rising restitution orders signals FINRA’s enhanced focus on investor protection and market integrity. This trend suggests compliance officers should prioritize reviewing their trade reporting systems, anti-manipulation controls, options trading supervision, technology risk management frameworks, and fingerprinting processes for non-registered personnel. A proactive approach to these priority areas, combined with prompt remediation when issues arise, will be essential for mitigating regulatory risk in the current enforcement environment.
