The Financial Industry Regulatory Authority (FINRA) reports that fines jumped from $40 million in 2019 to $57 million in 2020, which represents a 43% increase. The 2020 fine metrics illustrate FINRA's desire to protect retail investors as cases relating to retail-type products such as variable annuities, mutual funds, and 529 plans, totaled $8.5 million in fines. ThinkAdvisor explores FINRA's top 5 fine categories in 2020.
- Anti-Money Laundering: 2020 becomes the fifth consecutive year that AML has topped the list as well as the seventh consecutive year that AML has appeared on the list. In 2020, FINRA reported 14 AML cases, which resulted in $16.2 million in fines.
- Books and Records: In 2020, FINRA reported 29 books and records cases resulting in $14.5 million in fines. Books and records were impacted largely by one case in which FINRA fined a firm $6.5 million.
- Trade Reporting: Trade reporting has not appeared on the list since 2017. However, FINRA reported 34 cases and $7 million in fines in 2020. The 34 trade reporting cases qualifies as an astounding 113% increase from the 16 cases filed in 2019.
- Variable Annuities: In 2020, FINRA reported six variable annuity cases, which resulted in $6.1 million in fines. Also, FINRA ordered $5.8 million in restitution throughout those variable annuity cases.
- Unregistered Securities: While unregistered securities have not appeared on the list since 2016, FINRA reported six unregistered securities cases resulting in $3.9 million in fines in 2020. Unregistered securities were driven largely by one case where FINRA fined one firm $3.4 million.
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