In sports, the best defense can anticipate what the offense will do – and counter it, before the offensive players can gain an inch. It’s no wonder that teams of all levels – from youth sports to the pros – often study opponents’ past game footage before a game.
The same can be said of regulatory compliance: One of the best ways that enterprises can maintain compliance is by anticipating what regulatory authorities will do – for instance, what regulators would look for if an audit were to occur. No enterprise wants to be caught unprepared, just as in sports no defensive players want to see the offense shimmy past them heading towards that touchdown or goal.
Well, enterprises, have I got good news and bad news for you.
First, the bad: The total fines reported by the Financial Industry Regulatory Authority (FINRA) increased by 43 percent from 2019 to 2020, from $40 million to $57 million. That’s according to data released by the law firm Eversheds Sutherland and reported in ThinkAdvisor.
But I also have good news. Thanks to this same data, you have access to FINRA’s “game footage.”
No, it’s not FINRA regulators out on the football field; it’s better than that: It’s the FINRA’s top 5 fine categories of 2020. Knowing what FINRA fined the most last year can help enterprises take a good, hard look at their own areas of business that might be most vulnerable for compliance issues.
For instance, the fifth highest fine category, unregistered securities, may come as a surprise to some enterprises. After all, this category had not appeared on the Eversheds Sutherland Top Enforcement Issues list since 2016, according to ThinkAdvisor.
The data for the fourth highest fine category, variable annuities, is also surprising. Although the number of cases decreased 67% from 2019 to 2020, the fines increased more than tenfold.
Then, there’s #3 – trade reporting, which had not appeared on Eversheds Sutherland Top Enforcement Issues list since 2017.
And the amount of fines issued in the second-highest category – books and records – might shock you. Better hold your coffee steady. Although the number of cases decreased 45% from 2019 to 2020, the total fines increased by 663%.
Finally, not surprisingly, anti-money laundering was at the top of the list for the fifth consecutive year.
Fortunately, along with this data – the “game tape footage” – enterprises have another tool to help with compliance: Copytalk.
With Copytalk’s secure transcription services, enterprises can provide their advisors with a solution for easy and efficient documentation, while also maintaining data privacy. Advisors can use Copytalk to capture the details of any meeting, whether with a client or an internal discussion, and transcripts of client meetings and interactions can serve as records that oral disclosures were made. Plus, Copytalk is the only mobile transcription company that is a member of the Shared Assessments organization, which sets standards in third party vendor risk management.
And so, while a 43-percent increase in fines is scary, enterprises can rest assured that they have a partner in Copytalk.
For more information please contact:
Maree Moscati, CEO CTPRP