How Many High Risk Brokers Are Sanctioned By FINRA? 16 out of 630,000!

Trigger

Wall Street Journal on its front page of 11/22/2013 had an article titled “FINRA Is Cracking Down On ‘High-Risk Brokers’” (Subscription only).

FINRA - A Self-Regulatory Agency

Self-regulatory in this context is an euphemism.

According to Wikipedia: “In the United States, the Financial Industry Regulatory Authority, Inc. (FINRA) is a private corporation that acts as a self-regulatory organization (SRO). FINRA is the successor to the National Association of Securities Dealers, Inc. (NASD) and the member regulation, enforcement and arbitration operations of the New York Stock Exchange. It is a self-regulatory organization, a non-governmental organization that performs financial regulation of member brokerage firms and exchange markets.” (emphasis added).

FINRA is roughly speaking an extended arm of the Securities Exchange Commission (SEC). It is a fig leaf of sorts to make it less obvious that Big Government regulates and controls the financial sector.

A Very Few Black Sheep

One thing you might take away from this article is that the number of rogue or violating brokers is very small.

Only 16 brokers lost their license out of a total of about 635,000 registered brokers.

The above article also reports that “1,342 brokers” were “booted” (whatever that means) between “January 2011 through September 2013”.

What To Make Of It?

It appears that more than 95% of all registered brokers are reasonably honest and fair dealing.

That FINRA and most other regulations of brokers are overkill!