Volcker Rule Reforms

The Head of Enforcement at FINRA was the Latest Guest on its Podcast

finraFINRA is the Financial Industry Regulator Authority, and it is the self-regulatory organization over the securities industry in the US. 

Jessica Hopper is FINRA’s new Executive Vice President and Head of Enforcement, and she was the latest guest on FINRA’s podcast, Unscripted. 

Quickly the conversation turned to coronavirus. 

“It’s been a challenge for everyone, for sure. I think this has been a complicated time. The pandemic has affected everybody in such personal ways, and on top of that, we’ve been asked to scatter to the winds and work from our home.” Hopper said. “So now we are on an all-remote environment. What hasn’t changed though and what remains our North Star during all of this is our commitment to protecting investors and market integrity, and that’s been very grounding for everyone. So now more than ever, it’s incumbent upon enforcement to act quickly and aggressively to stop the folks who are taking advantage of this time to defraud investors or to manipulate the volatile market. And that’s precisely what we want to do every day.

“So, we’re ready. And thanks to the great technology that we have, we’ve been able to not skip a beat along the way. We’ve been focused on our dockets. We’ve done everything we can to keep our cases moving and to keep the confidence of the investing public and make sure that the markets are doing what they’re supposed to be doing. So, it’s been a big challenge, but I am not surprised and eternally impressed with my staff for keeping their eye on the ball.”

Hopper was also asked about her vision for FINRA.

“My vision for FINRA Enforcement is what I believe FINRA Enforcement always has been. I look at FINRA Enforcement as being tough but fair. And what that means is that when enforcement is the right regulatory response, that we are thoughtful, we are thorough in our investigation, but we’re also quick and nimble and data-driven and effective. So, if we find that a broker is stealing from customers, we have to move urgently.”

He further stated: “We have to make sure that once we investigate the broker quickly and identify that the broker is, in fact, stealing from the customer that we want them out of the industry. And we can do that in as little as a few weeks after learning about the misconduct. And so being tough, we really are focused on our four priorities, and these priorities are evergreen. They will be priorities eternally.”

“So, our first priority is obtaining restitution for harmed customers. When a customer has been financially harmed through whatever misconduct we identify, we want to get the money back to them quickly. We’re also focused on ridding the industry of the brokers who are doing the misconduct that includes fraud or other really bad stuff–misconduct that’s going to affect customers. And we are double down on those brokers who have a past history of misconduct and who continue to not get it right. And we will always be focused on seniors and vulnerable investors.”

“Those are the customers who the worst brokers are going to prey upon. Those are the customers who are most likely to be harmed. And finally, we’re committed to ensuring the integrity of markets, because if we don’t have markets that are reliable then we’re not going to have the trust of investors, and the industry just can’t succeed.”

Hopper also comes from a varied background; she noted, “I’ve been at FINRA since 2004, and I actually started as a line attorney. Through time I rose the ranks and ultimately headed the Regional Enforcement program. And that responsibility was over the 14 district offices. I did that for a few years, and then I worked closely with Susan Schroeder as the Deputy Head of Enforcement, and now I’m lucky and privileged enough to be the Head of Enforcement. During that time, I really have had an opportunity to work with many in the securities defense bar. So, I have had a lot of exposure over the long time that I’ve been at FINRA. I’ve also spent a lot of time speaking on behalf of FINRA. So, I think a lot of folks have seen me out there.”

When Hopper took over, enforcement had recently gone through consolidation, but Hopper said her unique experience made that transition easier.

It’s not, because it’s not really a new team to me, and it doesn’t really feel like an inheritance. Like I said, I’ve been here for a long time and I’ve worked with the team on every level for 14 years so when we did the transition, I worked closely with Susan Schroeder, and the idea of consolidation and all the changes we made were ones that both Susan and I closely considered carefully before we implemented. All of the changes we made or the result of the FINRA 360 review, and we found that to be really helpful to understand not just what we were doing right but what we could improve on. And that’s super-valuable information.

“So, we consolidated the Market Regulation Enforcement team with the rest of the Enforcement Group, so that enforcement would finally speak with one voice. That consolidation has allowed us to focus more clearly on our priorities and to be even more consistent with our outcomes. We’re also very fortunate to have all the Market Regulation attorneys working with the rest of the Enforcement staff. And that has expanded our expertise, which has been extremely valuable in how we look at every case that comes across the docket.”

The consolidation of the enforcement department at FINRA was discussed further on this Unscripted podcast.