As noted in my current Street Legal column at Registered Rep. Magazine<> ,

without admitting or denying the
allegations, respondents Fortune Financial Services and its Registered
Principal Brian Lee Daniels consented to the entry of findings and
sanctions
pursuant to the Financial Industry Regulatory Authority’s (FINRA’s)
Acceptance, Waiver and Consent (AWC) settlement process. FINRA
found that acting through Daniels, FFS failed to maintain and preserve
all of
its business-related electronic communications (and lacked adequate
policies
and procedures relating to such record retention); improperly increased
the
number of registered representatives in its offices despite failure to
obtain
FINRA’s approval; and conducted business at unregistered branch
offices.

Daniels was fined $25,000 and suspended nine months in Principal capacities only.  FFS was censured and fined $125,000 — but it's what comes next that's truly noteworthy. In addition, FFS was prohibited for 90 days, commencing five business days after issuance of the AWC, from registering any associated persons, except for individuals who perform only compliance and/or supervisory duties.

Why does there always seem to be a regulatory woodshed for FINRA's member firms and registered reps but no place for the regulator to take a time-out when it misbehaves? Was FINRA fined for its lapses as documented in the press and its own Madoff Report? www.brokeandbroker.com/index.php?a=blog&id=250 Not that I have read. Were any senior level FINRA regulators suspended or fired? Again, not that I have read. Oddly, FINRA imposes a hiring ban upon the likes of FFS, yet sees no inconsistency with simply sloughing off its own shortcomings and seeking even more responsibilities among investment advisors and financial planners (with the concomitant increase in revenues).

TO READ MORE, VISIT

http://registeredrep.com/advisorland/regulatory/finance_woodshed/