FINRA Enforcement Actions Rose Sharply in Early 2012

June 8, 2012 – In The News

The number of fines levied by the U.S. nongovernmental regulator of securities and brokerage firms more than doubled in the first five months of 2012 compared to the same period in 2011. The Financial Industry Regulatory Authority (FINRA) has levied 20 anti-money laundering (AML) enforcement actions between January and June. This year's 20 AML enforcement actions compare to only 9 such actions levied during the same months in the previous year.

The increase in AML enforcement actions coincides with FINRA's renewed access to suspicious activity reports (SARs) that was granted by the U.S. Securities and Exchanges Commission (SEC) in January. According to the data, the rise also comes as FINRA has further cracked down on brokerages tied to Ponzi schemes.

Joshua Horn, co-chair of the firm's Securities Industry Practice, recently spoke with Alert Global Media about the spike in AML enforcement actions.

"One of the first steps that broker-dealers have to take in blocking Ponzi schemes is knowing where the money is coming from, so of course AML is going to play a big role in that area," said Horn. "The SEC and FINRA were embarrassed with the Madoff and Stanford scandals, so if they're focusing on risk and systemic risk, Ponzi schemes have to be a priority."