SEC vs. FINRA: Which Regulator Is Tougher?

If you read the press releases sent out by FINRA and the Financial Services Institute, you'd believe that dually registered advisors are tightly regulated while independent RIAs operate in a loosey-goosey regulatory environment that is dangerous to individual investors. According to this view, FINRA's risk-based inspection program has an examiner in the broker-dealer's home office every two years or so, on average, and sometimes every four years - while rogue RIA firms host an SEC examiner once every eight to 10 years. The only reason these RIA firms have given up commissions, the argument continues, is so they can evade regulatory supervision of their dark and dangerous activities.

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