Judging from the sharp increase in enforcement actions and fines (up to $68 million in 2011 vs. $45 million in 2010) FINRA, the chief regulator of stockbrokers and broker dealers in the US, is taking their job more seriously.
According to the Investment News, FINRA disciplinary actions in 2011 were up to 1,488 from 1,310 in 2010. This is the third year in a row the trend has been on the upswing and no doubt it is related to the embarrassment caused by the discovery of the Madoff & Stanford Ponzi schemes that had eluded regulators for years.
The biggest area of concern apparently focused on advertising where fines increased to $21 milllion vs $4.75 million in 2010. Living in the sunbelt it is easy to understand how the regulators could easily find as many advertising violations as they choose to pursue. Just look at the local papers any given week and one can find numerous questionable advertisements.
FINRA is also taking aim at complex investments being marketed and their suitability for the individual investor. Brokers have always had a duty to make suitable recommendations to their clients, and FINRA seems more concerned about this than in the past. Given the number of baby boomers with underfunded retirement accounts, regulators need to provide more protection.
If you don’t understand an investment, perhaps it is not for you.
Rex Securities Law , located in Boca Raton, FL, provides representation to investors nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.
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