Is a Great FINRA Purge Coming?
August 26, 2022 By Diana Britton, WealthManagement.com As firms scramble to stay off FINRA’s new 'leper list' of broker/dealers with histories of misconduct, some say smaller businesses and reps with only minor regulatory blemishes are being unduly tarnished. Until recently, registered reps with only a few disclosures on their records could easily find a home at a broker/dealer to hang their license. But those days may be coming to an end, due to the Financial Industry Regulatory Authority’s Rule 4111, which went into effect Jan. 1, 2022. FINRA’s new rule requires broker/dealers that the regulator determines pose the greatest risk to investors to set aside funds in a dedicated account to meet future FINRA fines, including potential unpaid arbitration awards. Broker/dealers don’t want to end up on FINRA’s list, especially one that would be made public, so many are taking steps to avoid it, say recruiters and compliance...