FINRA Enforcement Actions in 2024: Fines Drop But Cases Increase
From the desk of Jim Eccleston at Eccleston Law
The Financial Industry Regulatory Authority (FINRA) imposed $59 million in fines in 2024, reflecting a 35 percent decrease from the previous year, according to an analysis by Eversheds Sutherland. However, the 2023 total was skewed by a $24 million fine against a single firm—Bank of America’s securities arm—for spoofing in Treasury markets. Without that significant penalty, the 2023 fine total would have been $65 million, about 10 percent higher than in 2024.
According to ThinkAdvisor, the data shows that while total fines decreased, enforcement activity intensified. FINRA reported 552 disciplinary actions in 2024, marking a 22 percent year-over-year increase and reversing an eight-year decline in case volume.
Key Enforcement Trends
Fifteen firms received “supersized” fines of $1 million or more, up from 14 in 2023. However, only one firm faced a “mega” fine of $5 million or more, compared to four in the previous year. Below are the top five enforcement issues by total fines assessed in 2024, as reported by ThinkAdvisor:
Fingerprinting of Non-Registered Persons ($2.7 million)
FINRA brought six cases related to firms failing to properly fingerprint non-registered persons. The largest fine, $1.3 million, was levied against a firm that failed to fingerprint and screen for statutory disqualification among 2,317 non-registered associates outside the U.S. and 1,663 based domestically who were required to be fingerprinted.
Technological Issues ($3.5 million)
FINRA fined firms approximately $3.5 million across six cases involving technological failures that led to regulatory violations. The largest penalty, $1.4 million, was imposed on a firm for providing inaccurate interest rate information due to data and coding errors in account statements, trade confirmations, and online access portals between 2010 and 2022.
Options Trading ($4.3 million)
Appearing for the first time on the Top 5 list, options trading violations led to $4.3 million in fines across four cases. The largest fine, $2 million, was imposed on a firm that failed to detect customers engaged in free-riding—buying and selling securities without paying for them. Additionally, FINRA sanctioned firms for not having adequate systems to approve customer options trading.
Spoofing ($6 million)
FINRA pursued two spoofing cases in 2024, with the most significant resulting in a $6 million fine—the largest single fine of the year. The sanctioned firm engaged in 813 instances of spoofing U.S. Treasury securities and futures between July 2017 and May 2019. Spoofing is a fraudulent trading practice that manipulates market activity by placing non-bona fide orders to create a false impression of demand.
Trade Reporting ($9 million)
Trade reporting violations remained a top enforcement focus for the fifth consecutive year. FINRA sanctioned 21 firms, imposing $9 million in total fines. The largest fine, $2 million, was levied against a firm for failing to accurately report execution times for at least 1.5 million primary market transactions and underreporting more than 422,000 allocations of TRACE-eligible securities to client accounts.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
Tags: eccleston, eccleston law, finra
