Expelled Stockbrokers vs. Disbarred Lawyers

Tuesday, March 1, 2016

Earlier this year, USA Today reported that FINRA suspended a record number of brokers in 2015, but the FINRA chairman, Richard Ketchum, responsible for the crackdown is retiring. 

A review of FINRA statistics, including data on investor protection, shows that FINRA got results more or less on par with 2014.  In 2015, 492 brokers were barred from Wall Street. That compares with 481 brokers barred in 2014, only eleven fewer.  In 2015 FINRA levied fines of $93.9 million.  That compares with $134 million in fines in 2014.  The numbers of firms expelled from 2010 to 2014 varied between 14 and 30.

Just to be fair to registered representatives -- and because there are bad apples in any profession -- I took a look at how many lawyers have been disbarred for the sake of comparison.

In 2011, according data reported in an American Bar Association (ABA) article, 652 lawyers were involuntarily disbarred nationwide, up from 503 in 2010. By comparison, 329 brokers were expelled in 2011 up from 288 brokers in 2010.  The Boston Globe reported that in 2011 there were about 1.22 million lawyers in the United States, which matches ABA data.  This compares with about 630,000 brokers in 2011, according to FINRA data

The conclusion from this very unscientific survey, looking at 2011 only, lawyers were suspended at about the same rate as stockbrokers! No further comment.

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