The Financial Industry Regulatory Authority, Inc. (FINRA) posts the disciplinary actions it took to an online database. It also publishes a monthly summary of these actions, which is a worthwhile read for those in the industry—if only for insight into FINRA’s current priorities. Below, I offer a thought on FINRA’s February 2026 edition.
Supervisory Procedures and Systems Continue to be Important
By my count, 23 of the cases reported cited alleged failures in supervisory systems or procedures. The issues included trade reporting—which is one of those “bright-line” cases that are simple to prosecute—associates’ activities, and AML surveillance.
Of course, this should come as no surprise to anyone in the industry—exams and investigations almost always include a review of the firm’s written supervisory procedures. I always requested these when I was a regulator.
Recommended Practices
Broker‑dealers and registered investment advisers should regularly review and test their policies and procedures to ensure they reflect current business practices and can be effectively followed by personnel. Ineffective or impractical procedures can be more harmful than having none. Developing sound supervisory procedures requires both technical precision and practical judgment. Firms seeking guidance may find my 6 Tips for Writing Supervisory Procedures – The ABCs helpful, which is available as a free download.
If you would like to discuss strengthening your firm’s supervisory framework, please feel free to contact me. Strong, workable procedures help firms focus on serving clients—not regulators. Because broker-dealers, registered investment advisers and their associates want to spend their time serving their clients, not their regulators.
Because broker-dealers, registered investment advisers and their representatives want to spend their time serving their clients, not their regulators.
Read On:
- Law and Order – January 2026
- Douglas Adams Meets FINRA
- 6 Tips for Writing Supervisory Procedures – The ABCs
- December at the SEC: DTC Tokenization Pilot and Marketing Rule Risk Alert
- He Has a Degree in What?
- Lessons from the Marine Corps Marathon
- With Apologies to Jerry West
- E-Mail Retention
- A Recipe for Failure
- Law and Order – December 2025
- Law and Order – November 2025
