The Financial Industry Regulatory Authority (FINRA) continues its investigation into the broker-dealer “culture.” Last week, FINRA published a letter it sent to several member firms asking for information on how the firms establish cultural values among their employees.
FINRA is planning on following up its letter with site visits to the firms to speak with executives about their practices. FINRA also has asked for descriptions of how firms promote company values and how they deal with employees who undermine those values.
Firm culture was at the center of FINRA’s release last month outlining its annual regulatory priorities. According to FINRA Chairman and CEO, Richard Ketchum, “Firm culture has a profound influence of how a firm conducts its business and manages its conflicts of interest.”
Although FINRA did not specify why firm culture was being looked into, the request letter pointed out that more than $300 billion has been paid in fines and litigation costs over “cultural failures” since 2010. Of particular note is how firms handle subcultures that operate within a firm, to the firm’s possible detriment.
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Firm culture can lead to lapses in judgment and oversights that can cause you to lose money on your investments. If you have suffered an investment loss resulting from firm-wide bad practices, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles securities attorney for a consultation today.