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FINRA EVP of Enforcement Susan Schroeder Announces Departure
Traders Magazine Online News, September 23, 2019
FINRA announced Susan Schroeder plans to leave FINRA later this year, after leading the Department of Enforcement since 2017. Schroeder led the consolidation of FINRA's enforcement functions into a new, unified group. The consolidated enforcement team now comprises 340 employees working in New York, Rockville, and 14 district offices handling disciplinary actions from across FINRA, from potential fraud to trading-based misconduct to sales practice violations.
"Strong, consistent enforcement is critical for FINRA's mission of protecting investors and market integrity," said FINRA President and CEO Robert W. Cook. "The transformation of the enforcement programs under Susan's leadership has enhanced FINRA's ability to advance that mission and target developing issues that can put investors and markets at risk. I would like to thank Susan for her dedication and service to FINRA."
"It has been a privilege to work each day with my colleagues at FINRA, who are fiercely dedicated to the investors they protect," said Schroeder. "Enforcement removes bad actors from the market, returns money to wronged investors, and prevents future harm—critical functions so that investors can rely on a safe market to fund their educations, retirements, and lives. I am so grateful to have been a part of that important work. The opportunity to lead the department's consolidation was an additional honor, and I am proud of the innovative solutions FINRA has implemented as part of its commitment to constantly enhancing regulation."
Jessica Hopper, Deputy Head of Enforcement, has been named the Acting Head of Enforcement. FINRA will undertake a search for a new head of Enforcement that will consider both internal and external candidates.
Schroeder led the design and implementation of FINRA's unified Department of Enforcement, which was the result of FINRA360, the organization's ongoing comprehensive self-evaluation and improvement initiative. The new unit brought together two distinct enforcement teams within the organization—one handling disciplinary actions related to trading-based matters found through Market Regulation's surveillance and examination programs, and the other handling cases referred from other regulatory oversight divisions including Member Supervision, Corporate Financing, and Advertising Regulation.
The Department is now designed to facilitate more consistent decision-making and outcomes, and to enhance the transparency of disciplinary process. To further these goals, Schroeder publicly outlined the principles guiding FINRA's enforcement decisions and established new centralized functions for investigative work and for handling disciplinary referrals from across the organization. FINRA also released new guidance on credit for "extraordinary cooperation" in investigations that can substantially assist FINRA in meeting its goals of investor protection and market integrity.
Under Schroeder's leadership, FINRA brought a number of significant enforcement actions that won restitution for harmed customers, including for misconduct involving unsuitable recommendations and excessive trading in customer accounts. FINRA also launched a targeted self-reporting initiative to promptly compensate harmed investors and promote firms' compliance with the rules governing the recommendation of 529 education savings plans.
Other significant cases during Schroeder's tenure resulted in sanctions to remedy misrepresentations to investors regarding 401(k) programs and variable annuities, sales of IPO shares to insiders, violations of screening requirements for firm employees, disclosures of inaccurate research ratings, and violations of rules regarding anti-money laundering, market access, and short selling.
Prior to becoming the Head of Enforcement in 2017, Susan was Senior Vice President and Deputy Chief of Enforcement at FINRA for six years. Before joining FINRA, Schroeder was a partner in WilmerHale's Securities Litigation and Enforcement practice.
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