FINRA Continues to Prioritize Examinations of High-Risk and Recidivist Brokers

In its 2017 Regulatory and Examination Priorities Letter, FINRA made clear that one of its top priorities is identifying high-risk brokers and ensuring that their firms properly monitor them. To assist it in doing so, FINRA has established a dedicated examination unit to identify and examine brokers who may pose a high risk to investors. That unit’s charge is also to (1) review firms’ supervisory procedures for hiring or retaining statutorily disqualified and recidivist brokers; and (2) evaluate firms’ branch office inspection programs and supervisory systems. At the November 1, 2017 Securities Industry and Financial Markets Association (“SIFMA”) Compliance and Legal Society Regional Seminar in New York, Michael Solomon, FINRA’s Senior Vice President and Regional Director, updated and expanded on this examination unit’s progress in identifying and examining high-risk brokers. Use of Data Analytics to Identify High-Risk Brokers Mr.…

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