FINRA also plans to broaden the "High Risk Broker" program that uses expedited examinations to target brokers who have a pattern of complaints. In particular, the practice of 'cockroaching', when brokers with a large number of complaints switch brokerage firms, will come under intense scrutiny.
FINRA specifically mentions that algorithmic trading and high frequency trading (HFT) will be in their crosshairs in 2014. In particular, FINRA wants to ensure that firms are meeting their supervisory obligations and preventing the use of HFT to manipulate markets. HFT was a hot topic in 2013, especially related to the early release of economic data to fee-paying HFT firms, and remains highly controversial.
We've been seeing a large volume of cases come across our desks that touch on each of these topics. Whether it is an ultra high net worth investor with a portfolio full of investments the broker doesn't even understand or a recent retiree bilked out of their life-savings, we think these priorities are hitting the nail squarely on the head.