5 Things You Did Not Know About FINRA: #3 FINRA Investigates Potential Abuses

By: Alexandra Hughes, Fall 2015 Student Intern

In addition to FINRA’s rulemaking and disciplinary roles, FINRA also investigates potential abuses in the securities markets in an effort to protect investors and to keep the markets working as effectively and efficiently as possible. Technology enables FINRA to process between 30 billion and 50 billion transactions every day. Processing transactions enables FINRA to gather a holistic picture of the market and to detect fraud. As a result of FINRA’s investigative function, over 700 fraud and insider trading cases were referred to the SEC and other agencies for litigation and/or prosecution in 2014.

Recent actions resulting from FINRA referrals to state and federal authorities include:

  • 18 month sentence and permanent expulsion from trading in securities of Joseph Gaetano Bucci, president and CEO of Coastal Pacific Mining Corp., for dealing securities without registration, not filing a prospectus, and engaging in a “pump and dump” market scheme
  • Payment of $4.25 million penalty to settle charges that Credit Suisse Securities (USA) LLC violated the recordkeeping and reporting provision of federal securities laws by making at least 593 deficient “blue sheet” (trades done by its customers) submissions to the SEC from January 2012 to January 2014
  • Payment of $489,000 to settle charges made by SEC against 5 Florida residents (including two lawyers and an accountant) for insider trading before the November 21, 2011, public announcement of the acquisition of Pharmasset Inc. by Gilead Sciences Inc.