2024 FINRA Sanctions Study

The fines reported by FINRA in 2024 decreased to $59 million from $89 million in 2023, a 35% decrease.^[1] The fines in 2023, however, included a single $24 million fine against one firm. Without that one large fine, 2023’s total fines would have been $65 million, or 10% more than 2024.

While the total amount of fines decreased, the number of cases with very large fines increased slightly in 2024. FINRA ordered 15 fines of $1 million or more (what we call “supersized” fines) in 2024, compared with 14 such fines in 2023. However, in 2024, FINRA assessed only one fine of $5 million or more (what we call “mega” fines), compared to four mega fines assessed in 2023.

Although fines were down, the amount of restitution ordered by FINRA in 2024 increased substantially. FINRA ordered restitution of approximately $23 million, which was up 207% from the $7.5 million in restitution ordered in 2023. This increase in restitution corresponds with the number of “supersized” restitution orders ($1 million or more). In 2024, FINRA ordered seven firms to pay supersized restitution, totaling approximately $18 million. In 2023, FINRA ordered only one firm to pay supersized restitution of $1 million.

As a result, the total monetary sanctions ordered by FINRA (fines, restitution and disgorgement) in 2024 were $87 million. This represents a 14% decrease from the $101 million in total sanctions ordered in 2023.

The graph and table below display the amounts of fines and restitution in millions that FINRA reported during each of the past ten years:

Finally, the number of cases reported by FINRA increased last year, after declining for eight consecutive years according to FINRA’s Statistics. FINRA reported 552 disciplinary actions in 2024, a 22% increase from the 453 disciplinary actions it reported in 2023.

The chart and table below display the number of disciplinary actions FINRA has filed each of the last ten years:^[2]

[1] The 2024 data comes from FINRA’s monthly disciplinary reports, its Disciplinary Actions Online Database and press releases.

[2] For this chart, the “FINRA Statistics” are the number of disciplinary actions reported on FINRA’s Annual Reports or “Statistics” web page, while the “FINRA Online Data” (including the 2024 total) are the number of actions contained in FINRA’s Disciplinary Actions Online database. FINRA has not yet released its Annual Report or updated its “Statistics” web page for 2024. FINRA defines disciplinary actions as Letters of Acceptance, Waiver and Consent, Complaints, Rule 9522 suspensions and Minor Rule Violations. E.g., Study on Investment Advisers and Broker-Dealers, SEC (Jan. 2011). When FINRA formally reports “New Disciplinary Actions Filed,” the 2024 number will be different from the number of cases found on its database.

Listed below are the top FINRA enforcement issues for 2024 measured by total fines assessed:^[3]

No. 1      Trade Reporting cases resulted in the most fines for FINRA in 2024. This marks the fifth consecutive year that trade reporting cases have been on the Eversheds Sutherland Top Enforcement Issues list. FINRA reported 21 trade reporting cases in 2024, resulting in a total of approximately $9 million in fines. In the largest trade reporting case, FINRA fined a firm $2 million for failing to accurately report execution times for at least 1.5 million primary market transactions in TRACE-eligible securities and underreporting more than 422,000 allocations of various TRACE-eligible securities to client accounts.^[4]

No. 2      Spoofing cases  resulted in the second most fines assessed by FINRA in 2024, totaling $6 million. Though there were only two spoofing cases in 2024, one of those cases resulted in a $6 million fine—the largest fine in 2024.^[5] In that case, FINRA found that the firm engaged in 813 instances of spoofing US Treasury securities and US Treasury futures between July 2017 through May 2019.^[6] Spoofing is a type of fraudulent trading that involves the use of non-bona fide orders to create a false appearance of market activity on one side of the market to induce other market participants to execute against bona fide orders entered on the opposite side of the market in the same security or a correlated product.

No. 3      Options Trading cases resulted in the third most fines for FINRA in 2024. This is the first time options trading has appeared on the Eversheds Sutherland Top Enforcement Issues list. FINRA reported four options trading cases in 2024, resulting in a total of approximately $4.3 million in fines. In the largest options trading case, FINRA fined a firm over $2 million for failing to detect customers with cash accounts who engaged in “free-riding” in options and issued options on more than 4.2 million occasions between October 2015 to December 2022.^[7]  Free-riding is the buying and selling of securities before paying for them. In many of the options trading cases, FINRA sanctioned firms for not having systems reasonably designed to approve customers’ options trading.^[8]

No. 4      Technological Issue cases resulted in the fourth most fines for FINRA in 2024. FINRA reported six technological issue cases in 2024, resulting in a total of approximately $3.5 million in fines. Technological issue cases involve a system malfunction due to technological or human error that results in failure to comply with regulatory obligations. In the largest technological issue case, FINRA fined a firm $1.4 million for providing inaccurate interest rate information due to data and coding issues on account statements, trade confirmations and the online access portals the firm provided for customers and registered representatives of the introducing firms that used its clearing services between January 2010 and December 2022.^[9]

No. 5      Fingerprinting of Non-Registered Persons cases resulted in the fifth most fines for FINRA in 2024. FINRA reported six cases where non-registered persons were not fingerprinted, resulting in a total of approximately $2.7 million in fines. In the largest case, FINRA fined a firm $1.25 million for failing to fingerprint and screen for statutory disqualification any of its 2,317 non-registered associated persons based in foreign locations and 1,663 US-based non-registered associated persons who were required to be fingerprinted and screened.^[10]

• Constitutional & Political Challenges to FINRA – Even before President Trump took office in January 2025, FINRA faced political challenges^[11] and multiple lawsuits questioning the constitutionality of its enforcement program.^[12] In addition, Project 2025—a Heritage Foundation white paper—calls for the abolishment of FINRA, stating it has “proved to be ineffective, costly, opaque, and largely impervious to reform” and that it should be abolished and its “regulatory functions should be merged into the SEC.”^[13] In the absence of abolishing FINRA, Project 2025 makes numerous proposals about how FINRA should be changed, such as making FINRA more transparent, simplifying and streamlining regulations and reducing the regulatory burden.^[14] Mr. Pollet noted, “Despite these constitutional and political challenges to FINRA and its enforcement program, it’s highly unlikely that FINRA will be abolished over the next four years, even if litigants or politicians are successful in curtailing certain practices or having the SEC more closely supervised FINRA.”

• Broker-Dealer Enforcement Under Trump I, Biden and Trump II – In Trump’s first presidential administration under Chair Jay Clayton, enforcement activity against broker-dealers at the SEC slowed down significantly, from 53 cases in 2017 to 40 cases in 2020 (a decline of 25%). Under Biden and Chair Gary Gensler, enforcement activity ratcheted back up, from 36 cases in 2021 to 61 cases in 2024 (an increase of 69%). Given the current political landscape under Trump’s second administration, it is likely we will see SEC enforcement slowdown, which may present opportunities for FINRA’s enforcement program to increase and fill gaps. The chart below displays the number of disciplinary actions FINRA and the SEC have filed against broker-dealers during the last eight years.^[15]

• Regulation Best Interest – Regulation Best Interest (Reg BI) has been on the books since June 30, 2020. Since its first Reg BI enforcement action in 2022, each year, FINRA has brought more Reg BI enforcement actions. In 2023, FINRA brought 15 Reg BI cases, resulting in a total of $6 million in fines (with one case responsible for a fine of $5.5 million). In 2024, FINRA reported 30 Reg BI cases, resulting in a total of $1.6 million in fines. We expect that this trend will continue. Mr. Rubin stated, “Regardless of whether SEC enforcement activity slows down under the second Trump administration, FINRA’s role in Reg BI examinations and enforcement actions will likely increase because it remains the primary regulator of broker-dealers.”

[11] See, e.g., Senator Elizabeth Warren’s August 28, 2024 letter to FINRA on Decreasing Enforcement Actions.

[12] See, e.g., Alpine Sec. Corp. v. FINRA, No. 24A808 (U.S. Feb. 18, 2025) (emergency application for stay of judgment pending petition for writ of certiorari).

[13]David R. Burton, Securities and Exchange Commission and Related Agencies, in Mandate for Leadership: The Conservative Promise (Heritage Foundation 2025).

[14] Id.

[15] The FINRA numbers are based on the number of actions contained in FINRA’s Disciplinary Actions Online database. The SEC’s numbers are based on the number of Civil Actions and Standalone Administrative Proceedings. reported by the SEC in its Addendum to Division of Enforcement Press Releases and its Annual Reports. See Addendum for 2024; Addendum for 2023; Addendum for 2022; Addendum for 2021; Annual Report for 2020; Annual Report for 2019; Annual Report for 2018; and Annual Report for 2017.