4. Short selling | Cases: 7 (down 70%) | Fines: $7.8 million (up 387%)
Short selling’s appearance on this list was primarily the result of a case against the electronic BD Interactive Brokers, which was fined $5.5 million for failing, despite numerous red flags, to establish supervisory procedures to achieve compliance with Regulation SHO.
3. Variable Annuities | Cases: 28 (up 22%) | Fines: $8.1 million (up 305%)
FINRA also ordered $8.7 million in restitution in variable annuity cases last year, compared with $428,000 in 2017.
2. Suitability | Cases: 91 (down 7%) | Fines: $11.8 million (down 228%)
FINRA also ordered $11.6 million in restitution in suitability cases, compared with $30.3 million in 2017.
1. Anti-money laundering | Cases: 17 (flat) | Fines: $27.3 million (up 87%)
AML maintained the top spot due in part to a fine against Morgan Stanley of $10 million, the largest fine FINRA assessed in any case in 2018.

(Related: FINRA’s Top 5 Fine Categories in First Half of 2018)

While the Financial Industry Regulatory Authority levied $68 million in fines against broker-dealers in 2018, a 5% jump from $65 million in 2017, the number of “supersized” fines of $1 million or more dropped last year.

In Eversheds Sutherland’s annual look at disciplinary actions reported by FINRA, culled from FINRA’s monthly disciplinary reports, press releases and online database, the law firm also reports that FINRA assessed 13 supersized fines, compared with 15 such fines in 2017.

In 2018, restitution ordered by FINRA was down significantly, Eversheds reports, at $31 million, a decrease of 54% from the $67 million reported in 2017.

“Last year, the amount of fines per case went up dramatically, while the number of cases decreased from the previous year, appearing to indicate that FINRA is coming down harder on firms when it decides to bring a case,” said Brian Rubin, partner at Eversheds Sutherland, in releasing the findings Monday.

In separate comments to ThinkAdvisor, Rubin explained that “in 2018, the average fine per case was approximately $107,000, while in 2017 it was approximately $65,000.”

However, Eversheds notes that the decrease in restitution is “less pronounced” when FINRA’s overall monetary sanctions are analyzed.

In 2018, total monetary sanctions ordered by FINRA (fines, restitution and disgorgement) were $124 million. The total sanctions ordered in prior years were $150 million in 2017, $207 million in 2016, and $193 million in 2015.

The number of cases reported by FINRA also decreased last year. FINRA reported 638 disciplinary actions in 2018, a decrease of about 37% from the 1,007 cases FINRA reported in 2017, Eversheds found.

As to individuals barred or suspended and firms expelled, the number decreased in 2018 compared to 2017, with FINRA barring 211 individuals in 2018, compared to 214 individuals in 2017.

The number of firms expelled by FINRA decreased from seven in 2017 to four in 2018, a decrease of 43%. The number of individuals suspended decreased significantly from 413 in 2017 to 254 in 2018, a decrease of 38%.

Check out the gallery above to see the top FINRA enforcement issues for 2018 measured by total fines assessed.

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