Warren Grills FINRA Chief Over Investment Adviser Misconduct

Sen. Elizabeth Warren on Thursday criticized the head of the Financial Industry Regulatory Authority for how the group disciplines investment advisers who violate industry rules.

FINRA Chief Executive Richard Ketchum, speaking at a Senate Banking Subcommittee on Securities, Insurance and Investment hearing, said his group suspends as many as 1,000 people each year for violations and cares “very much” about recidivism.

Warren (D-Mass.) said that’s not enough.

“I’m glad you’re looking at it, but you’re not taking them off the street,” she said.

Warren alluded to a paper published this week that found about seven percent of working investment advisers have histories of criminal, civil or regulatory misconduct. Many of the firms that hire those advisers employ them to provide investment guidance to “unsophisticated consumers,” Warren said.

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