FINRA, a self-regulatory organization (SRO), generated $129 million in net income in 2014, a sharp increase from the $1.7 million the SRO reported in 2013. Revenue increased to $996.6 million from $900.7 million, while expenses dropped to $964.8 million from $998.9 million, in part due to a voluntary retirement plan.
Thanks to its financial results, FINRA distributed a $20 million "discretionary rebate" to member firms for the second year in a row. In addition, each FINRA member also received a $1,200 rebate to offset its annual gross-income assessment fee and a rebate based on its pro-rated share of regulatory fees.
The organization was able to reduce its expenses thanks to saving on personnel costs through a voluntary retirement plan. FINRA said that 176 employees retired in 2014. FINRA has a staff of 3,500. Seven FINRA executives earned more than $1 million in compensation in 2014, up from four in 2013.
Regulatory revenue, which includes trading activity fees, gross income, personnel and branch office assessments, increased to $428.1 million in 2014 from $414.6 million in 2013. FINRA attributed the rise to increases in member firm trading volumes.
Although the number of monetary sanctions decreased in 2014 to 645 from 754 in 2013, the average fine increased to $205,600 from $80,100 in 2013. Last year, FINRA brought 1,397 disciplinary actions against member firms and registered representatives and assessed $132.6 million in fines. In 2013, it levied $60.4 million in fines. In 2014, the organization barred 481 brokers and 18 firms from the industry while suspending five firms and 705 brokers. It ordered $32.3 million in restitution to harmed investors.
FINRA regulates 4,100 brokerage firms, 161,600 branch offices and about 636,700 brokers.
The experienced securities litigation attorneys at Colling Gilbert Wright & Carter have litigated and resolved hundreds of FINRA arbitration claims. If you believe you lost money due to negligence or fraud on the part of your FINRA registered broker dealer, please contact us for a free case evaluation.