FINRA's Top 5 Fine Categories in 2023

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Fines issued by the Financial Industry Regulatory Authority in 2023 jumped to $89 million from $54.5 million in 2022, a 63% increase. The number of disciplinary actions and orders of restitution again declined compared to the previous year, according to a recently released analysis by Eversheds Sutherland.

The fines in 2023, however, included a single $24 million fine against BofA Securities. Without that one large fine, the total would have been $65 million, only a 19% increase from 2022.

Eversheds partners Brian Rubin and Adam Pollet compiled their report by studying FINRA’s monthly disciplinary reports, press releases and online database.

Not only did the total amount of fines increase, but the number of cases with very large fines also increased in 2023, the report found.

FINRA ordered 14 fines of $1 million or more (“supersized” fines) in 2023, compared with 11 such fines in 2022. In 2023, FINRA assessed four fines of $5 million or more, or “mega” fines. This doubled the number of mega fines that FINRA assessed in 2022, the report states.

In 2023, the amount of restitution ordered by FINRA decreased substantially. FINRA ordered restitution of approximately $7 million, which was down 66% from the $21 million in restitution ordered in 2022.

“This decline in restitution corresponds with the reduction of ‘supersized’ restitution orders ($1 million or more),” according to the report. In 2023, FINRA ordered only one firm to pay supersized restitution of $1 million, while in 2022 FINRA ordered three firms to pay supersized restitution totaling approximately $17 million, and in 2021 FINRA ordered ten firms to pay supersized restitution totaling approximately $42 million, the report found.

As a result, the total monetary sanctions ordered by FINRA (fines, restitution and disgorgement) in 2023 were $101 million, the report states. This represents a 25% increase from the $81 million in total sanctions ordered in 2022.

The number of cases reported by FINRA decreased again last year. “FINRA reported 453 disciplinary actions in 2023, a 9% decrease from the 496 disciplinary actions in 2022 and a 13% decrease from the 569 disciplinary actions in 2021,” the report states.

See the gallergy for the top five enforcement issues by total fines assessed, according to Eversheds.

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