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PODCAST

Regulatory Operations: Stronger Regulation Through Integrated Oversight

September 06, 2022

Member Supervision, Market Regulation and Transparency Services and Enforcement. These three teams together make up Regulatory Operations or Reg Ops, which is at the very core of FINRA's efforts to protect investors and ensure fair and efficient markets for all.

On this episode, we hear Greg Ruppert, Executive Vice President of Member Supervision, Stephanie Dumont, Executive Vice President of Market Regulation and Transparency Services, and Jessica Hopper, Executive Vice President of Enforcement, talk about how they are working together to increase coordination and to ensure integrated oversight, to be able to better anticipate and address risks.

Resources mentioned on this episode:

Conferences and Events

FINRA Report Cards

Episode 99: From NCFC to Member Supervision Head: Reintroducing Greg Ruppert

Episode 87: Introducing Stephanie Dumont

Episode 77: Behind the Process: How an Enforcement Action Becomes an Enforcement Action

Listen and subscribe to our podcast on Apple PodcastsGoogle PodcastsSpotify or wherever you listen to your podcasts. Below is a transcript of the episode. Transcripts are generated using a combination of speech recognition software and human editors and may contain errors. Please check the corresponding audio before quoting in print. 

FULL TRANSCRIPT

00:00 - 00:27

Kaitlyn Kiernan: Member Supervision, Market Regulation and Transparency Services and Enforcement. These three teams together make up Regulatory Operations or Reg Ops, which is at the very core of FINRA's efforts to protect investors and ensure fair and efficient markets for all. On this episode, we hear from the heads of all three groups about how they are working together to increase coordination and to ensure integrated oversight, to be able to better anticipate and address risks.

00:27 - 00:37

Intro Music

00:37 - 01:10

Kaitlyn Kiernan: Welcome to FINRA Unscripted. I'm your host, Kaitlyn Kiernan. I'm very excited to welcome an all-star cast to today's podcast. Today we have the three heads of FINRA's core regulatory operations groups with us to talk about the work they are doing to ensure a coordinated oversight. With us, we have Jessica Hopper, Executive Vice President of Enforcement. We have Stephanie Dumont, Executive Vice President of Market Regulation and Transparency Services. And we have Greg Ruppert, Executive Vice President of Member Supervision. Greg, Stephanie and Jessica, welcome back to the show.

01:11 - 01:12

Jessica Hopper: Thank you.

01:12 - 01:12

Stephanie Dumont: Thank you.

01:13 - 01:35

Kaitlyn Kiernan: You're all repeat guests with FINRA Unscripted. And we'll link to some of our earlier episodes together. So, we don't need to go in too deep here. But just to kick us off, can you tell us who you are, what you do at FINRA and maybe for something new, your preferred caffeinated beverage? Greg, do you want to kick us off since you probably need the most caffeine since it's early where you are?

01:36 - 02:13

Greg Ruppert: I am the Executive Vice President over Member Supervision and for the listeners, Member Supervision really handles a lot of the interface with the firms from the onboarding and the membership application process through exams, investigations that we conduct, as well as a lot of the specialty interfaces that we have in various components, member supervision. And we've had a number of my team on the podcast in the past. I actually pivot a lot between my favorite caffeinated beverages, depending on where I'm at and throughout the day. The latest guilty pleasure has been shaken espressos with oat milk.

02:13 - 02:17

Kaitlyn Kiernan: Oh, that sounds good. Stephanie, how are you?

02:18 - 03:31

Stephanie Dumont: Hi there. So, I'm Stephanie Dumont. I'm Executive Vice President of Market Regulation and Transparency Services. So, on the Market Reg side, we combine trading focused exams and cutting-edge automated surveillance that assesses billions of market events in equities options and fixed income securities. And in evaluating that, we review firms’ compliance with FINRA rules and the federal securities laws. On the transparency services side, as that name suggests, it is focused on bringing transparency to the equity and bond markets, and that really helps investors make informed decisions. And it also supports supervision and oversight by the regulators and the firms themselves. On the caffeinated beverage, one of my favorite indulgences for sure. So, I love Starbucks and I love a venti dark with extra half and half, and I enjoy more than one often in one day. And I'm a very frequent customer. And actually, when I travel, I appreciate hotels that have Starbucks in close proximity to the hotel. I'm dedicated.

03:31 - 03:42

Kaitlyn Kiernan: Fortunately, Starbucks are very easy to come by in most parts of the country. So that's helpful for your hotel selection. But Jessica, last but certainly not least, how about you?

03:42 - 03:59

Jessica Hopper: Absolutely. Thanks for having us again, Kaitlyn. First, I'm here to confirm Stephanie's deep and unabiding love of Starbucks. When I first met her, I wasn't prepared for how deep that love was and how committed she was to locating a Starbucks anywhere we were.

03:59 - 04:03

Stephanie Dumont: So, I appreciate your support in all endeavors of Regulatory Operations.

04:03 - 04:05

Jessica Hopper: Including caffeine.

04:05 - 04:05

Stephanie Dumont: Yes.

04:05 - 04:49

Jessica Hopper: But anyways, I'm Jessica Hopper. I am the head of Enforcement here at FINRA. We're pretty straightforward. We work really closely with Stephanie's team and Greg's team to investigate the worst misconduct that their teams identified and bring disciplinary actions when necessary. Oh, caffeinated beverage. Right. So, anyone who has met me knows already that I am caffeinated. I'm pretty caffeinated at all times. However, during the pandemic in particular, I've really committed to my coffee, multiple cups in the morning, and then I downshift to decaffeinated herbal teas. Not sure they help, but they have expanded my universe. So, there you go.

04:49 - 05:16

Kaitlyn Kiernan: Well, I myself am a loose-leaf tea drinker, and I actually travel with my own tea because it is so hard to find good tea when traveling. Well, thank you for that and for those fun intros. And it's good to know what's keeping everyone running through their busy days at FINRA with their caffeine. But just to start out now, what do we mean when we say regulatory operations or regulatory ops?

05:17 - 08:44

Jessica Hopper: Happy to jump in on that. Let's back up a little bit and talk about what FINRA does right? FINRA is a self-regulatory organization. I think Greg alluded to that a little bit. We're very membership driven, very different from the SEC in that way and the exchanges. And so, the core of the self-regulatory organization is the regulation. And the teams that form that regulation, the operations of that regulation, are Regulatory Operations. They're the three of us, our three teams: Member Supervision, Market Regulation, and Enforcement.

Member Supervision by far has the greatest touch points to the industry. Like Greg said, they start their interaction with the industry at the application process. You want to become a member, you work with Greg's team. They have this incredible team of risk monitoring, which does exactly what it sounds like. They monitor all the risks that are going out there. They look at the conduct, they look at all of that intelligence to make sure that we understand not just what's happening in the industry but can complement those touch points that we have. They've got the team that does examinations based on sales practice, conduct. Those are both routine and for cause. They have a whole group of investigators who do complex investigations on cyber and AML. Here's where I would tell you if you haven't gone to the FINRA Unscripted list, there are so many good podcasts that Greg and his team have done.

Let me shift over to Market Regulation because there are also really good podcasts on that. But shorthand, it's what Stephanie just described. They are there to surveil the markets and that's if you have been reading the newspapers. It is a very active place these days and a very changing place. So, Market Regulation looks at this, billions of lines of data. They're all experts on what they're seeing, and they look for anomalies or fraud or even trends just to understand what's happening. And then we work with the industry to warn them of the pitfalls, because what ultimately, we're trying to do as a regulatory operations team is ensure compliance, make sure that the investors are safe. We want a vibrant capital market, and part of doing that is making sure as a self-regulatory organization we're there.

And so that brings in Enforcement. Enforcement actually has a really tiny footprint. I feel like we're out there in the news a lot because we bring these disciplinary actions and the industry looks at them and goes, “Oh my gosh, this is significant.” Right? There's a fine. They put them out there in the settlement document and it talks in great detail about what's happening. But that's exactly the point. We deal with the worst or highest risk misconduct that's out there. When Stephanie's team or Greg's team finds it, they send it to us. We bring in disciplinary action and that's going to be out there in the world. Hopefully it tells the clear story of what happened so that we don't have it happen again. We have a sanction that's commiserate with that. That really provides an incentive to the industry not to have that happen again.

So that's Regulatory Operations. Is that a new concept? Not really. But why is it new and why are we on this podcast? We're here to talk about the three of us having a fresh look at what we do. The three of us are very growth minded, continual improvement, and we mean it. How can we do better? How lucky are we, first of all, to be able to protect investors in the markets? And how can we do that even better? And that's what this is. This is looking at an integrated Regulatory Operations, Reg Ops, where we can identify misconduct and figure out how to address it in the most efficient way possible. So, it's really exciting and it's fantastic to be working with a team that believes in the opportunities that we have here.

08:45 - 08:49

Kaitlyn Kiernan: So how does all of this relate to FINRA's goals?

08:50 - 10:44

Stephanie Dumont: Jessica describes Regulatory Operations perfectly. It's not new, but it really is a more focused and intentional look at our operations and how we can be more integrated. And it really is a cultural shift, too. We're being much more thoughtful and intentional about how all the different aspects of FINRA's operations and regulatory operations in particular, are connected and how they feed each other. So instead of doing hand-offs, we're integrating, we're working as teams across the groups. We're looking to be better and smarter. And so, to your question, Kaitlyn, by tying it to our corporate goals, I think it really brings the "why" home to staff every day. What's this Rep Ops? Why is it important? And one of our corporate goals is to strengthen the ability to anticipate and address risks to investors and markets through integrated oversight.

Integrated oversight is critical, and it's directly tied to better anticipating and addressing risks. Just to give you some examples of some of the more specific things that we are focused on in Regulatory Operations across all the groups we're looking at integrating, expanding, using our data. So, data is a big part of this. Same theme is using advanced analytics, using those techniques tools. This is going to help us create all different kinds of tools for staff to be able to pull information and insights from all the Reg Ops data sources and systems. So, what does that get us? It's going to get us better at anticipating and addressing risks. We're going to be nimbler. We're going to be more creative about tapping resources across FINRA. We're really going to be more thoughtful about how we can look across all the groups. We're going to be working as one team. The whole is greater than the sum of its parts.

10:44 - 11:01

Kaitlyn Kiernan: Greg, we've heard a phrase from you a couple of times on this podcast now, but when it comes to anticipating risks, we've heard you use the phrase "being left of boom." Omer Meisel on our last episode also used that term. So, can you tell us a little bit about what that means and where this phrase comes from?

11:02 - 13:07

Greg Ruppert: It's something that originated out of the national security community and in situations where there is some type of explosive event. So, there's the boom from that. But extrapolating out from that is it's a mindset shift of thinking about how to be more intelligence led versus reactionary, thinking about left of boom or being more proactive in our approach. It's a shift from what Jessica had talked about in terms of the Enforcement at the end of the day, after the violations occurred, after it's been fully investigated, after the case has been brought and sanctions have been given is there an opportunity, based on what we're seeing in the marketplace, with what's happening with investors, what's happening globally, with various events that are happening around the world that impacts people and markets and investors? Are there opportunities in those situations for us to think through our collective knowledge of the intelligence that we have, but also the expertise we hold in anticipating where we might see particular issues coming up in these situations that we can get more advanced notice out to our member firms and to investors to prepare them or hopefully mitigate bad things from happening.

So, from that standpoint, trying to get that left of boom, is that engaging in what some call the "gotcha" mentality of waiting for something to happen and then taking action after it happens, but paying it forward to make all of us better? We're really looking at ways we can engage our membership through reg notices, through conferences, through various events where we're calling out particular risks and or anticipated areas of increased focus so that we can align with our membership and all of the risk officers and compliance officers, people investigating fraud and cyber and money laundering and all of those other risks around the firm's surveillance apparatus so that we can engage together and collectively, not just within Reg Ops, but within our membership use our unique positioning as an SRO to do what we're charged to do, which is protect investors and safeguard the markets.

13:07 - 14:07

Jessica Hopper: Just to put an emphasis on what he said, Enforcement is very much after the fact. If we're lucky, we can stop the ongoing misconduct. But most of the time the damage has already been done. We already work closely with member supervision and market, but this is really all about what Greg just said. As a membership-driven organization, our goal is to prevent the bad things from happening to investors in the markets, and we're most effective in doing that as early as possible. So, it is not unusual to have a matter in Enforcement with Member Supervision or with Market Regulation where we decide not to go with an enforcement action because there is a better way of addressing that risk or that misconduct that we see. So, I think Greg is 100% right. I just wanted to make sure that from the enforcement perspective you hear it from me, we're really not trying to bring as many Enforcement actions as possible. We are trying to execute our mission as quickly and effectively as possible. And that absolutely does not always mean an enforcement action.

14:07 - 14:29

Stephanie Dumont: You think about where we've been dedicating resources recently with report cards, with rapid remediation that is all about keeping firms out of Jessica's world. And it's better for everyone. The sooner that potential issues are identified, the sooner firms can fix them. The better it is for markets, the better it is for investors.

14:29 - 15:11

Greg Ruppert: If you're sitting in a firm right now and Stephanie's comment about report cards is a term that you're unfamiliar with, let me advocate on their behalf that is actual real time or near real time intelligence being provided directly to the firm to allow them to make better decisions and potentially see additional risks that they may not be seeing, but is coming from a lens that we're able to see. So, I think some of the nomenclature that we have here at times might be confusing. When I hear report card, I think after the fact I'm being graded on something. This is actually an intelligence product that you should be looking at and seeing how you could leverage that again, left of boom before something is actually happening is a great opportunity.

15:12 - 15:28

Kaitlyn Kiernan: And we'll link to more information about the report cards and the events and conferences that Greg mentioned as well. But it sounds like when in ideal world you're working to help Jessica have less and less work to do. If we're so left of boom, Jessica can just sit back.

15:29 - 15:42

Jessica Hopper: I feel good with that. I feel like there is an abundance of the worst misconduct, whether it's excessive trading or other things, to keep us busy. So, we'll keep those markets and investors safe. No worries.

15:42 - 15:54

Kaitlyn Kiernan: So, as we heard from the introductions, you are still leading three different teams. What's different in how the Member Supervision transformation and Enforcement integration fit into all of this?

15:55 - 17:25

Greg Ruppert: The transformation that began a number of years ago, and its foundational approach, is rethinking how we were previously structured primarily in the district office and the regional office model. And we moved to a firm grouping model that allowed us to put firms based on their firm type in certain categories. And then from that we had to then realign how we addressed a number of the core functions that divide into three major components of the traditional exam approach that everybody is largely familiar with. Another group called Risk Monitoring that Jessica talked about at the top of the podcast, and then we have the NCFC, the National Cause and Financial Crimes Program, which is a multifactor, centralized approach around some of the more threat based or event-based investigations that have to happen within the world.

That is a starting point for our larger Reg Ops discussion. We're really seeing huge benefits from that centralization and our ability to be more specifically tailored to our members and the type of business and understanding those risks for those business models and then connecting back with the rest of FINRA for that one team approach. As a building block we really have to have a more centralized approach in terms of where we want to get to to be able to partner with the rest of our Reg Ops partners. So, from that standpoint, I think that we had to go through our area where we're seeing the benefits and it allows the rest of FINRA, I think, to be even more effective and efficient.

17:26 - 17:29

Kaitlyn Kiernan: And Jessica, how about the Enforcement integration?

17:30 - 19:21

Jessica Hopper: Yeah, like Greg says, it was key to getting to where we are now. For those of us who have been around for longer than six years or so in the industry, that is, there was a time when there were two enforcement groups within one FINRA. So as most large organizations experience, we grew and I think hit a point where we were saying, "What are we doing here? Why don't we look at what we're doing and why we're doing it? And what makes sense to keep and what makes sense to change?" And certainly, from an Enforcement perspective, as part of the FINRA360 review, it made sense to combine those Enforcement departments. And I can tell you that centralizing Enforcement at the same time that member supervision was centralizing their teams was really a good thing for all the reasons that Greg described.

I think what we saw was a disconnect in how we looked at matters that were appropriate for enforcement. Everyone brought their own sensibilities to it, so it was a good opportunity to hit the reset button and say, let's all come together, let's put one group together and let's approach these things from a centralized and uniform way. Let's create more of a sense of predictability or transparency for the industry. They're the ones who have to deal with enforcement. Let's make sure that your experience is the same regardless of where that referral originated. Your experience will be the same, and that level of predictability has set us up to have this integrated regulatory operation where we're really more effective together, we're able to understand what we expect to see as an enforcement action, and that gives the industry an easier time in figuring out why things are landing in Enforcement.

Do I think we're perfect? No, but I think we're really set up to move the needle on that and to help both the industry and become better as regulators because of that integrated group.

19:22 - 19:29

Kaitlyn Kiernan: With this renewed focus on talking about Regulatory Ops, was this was meant to foreshadow more transformations to come?

19:30 - 20:29

Stephanie Dumont: We're always evolving, of course, here, and we're always looking for opportunities to improve. You should never standstill in this industry as a regulator. You can't just take a moment in time and say, hey, we're done, we're good. You need to keep evolving. And that's how we operate here. And that's part of Reg Ops. But I would say evolving doesn't always have to mean a massive transformation for Reg Ops.

At this stage, we think is most effective with the three departments running as they are. So, we can preserve, while we're also augmenting, our existing, exceptional, functional and subject matter expertise that we already have on staff. But we are always looking at our programs. We want to make sure we are best positioned to anticipate and address risks to investors and markets, and we want to do it in the most effective and efficient way so that we can continue to do more and continue to always be the best that we can be.

20:30 - 20:46

Kaitlyn Kiernan: And we recently announced that Nathaniel Stankard has been promoted. Our listeners, if you were at the annual conference, you would have seen him on stage on the final day of the conference with Stephanie, Jessica, and Greg. But what's his role when it comes to Reg Ops and these efforts?

20:47 - 21:53

Greg Ruppert: When I think about Nathaniel's role and participating with us on this approach as we're focused on each of our departments, there's also a wider element of other aspects of what we do related to FINRA outside of the actual regulatory oversight that we're charged with. So when you think about things around budgeting, staffing, technology, the aspects of how we are going to communicate various things within the range of reg notices to conferences, to annual reports, all of those items require somewhat of an overlay that will weave in not just what we're dealing with in executing our missions for Member Supervision and Market Regulation and Enforcement, but then there's the one FINRA approach that then has to tie into each of these. So, he can address and provide that lens for us as a force multiplier. And with that, bring together more aspects of FINRA as we continue to drive into our teams and execute against those regulatory operational activities that we need to do every day.

21:54 - 22:20

Jessica Hopper: He's also a fantastic foil to our three personalities. He's a very calm and thoughtful guy. And I think when you get the four of us in a room, you've got four different types of personalities that interact really well together and complement each other. I think Nathaniel brings that very straightforward, practical view of how we can get some of the very insurmountable seeming problems done and across the finish line.

22:20 - 22:58

Stephanie Dumont: We're so excited about Nathaniel taking on this role formally. He essentially has been doing it for quite some time, and this formalizes what he's already been doing to further the Reg Ops integration and the culture. I think it really also just demonstrates the focus of the organization on this initiative and how important it is to the entire organization. So, I think we're really excited about having Nathaniel in this role and having him more formally dedicated to it and taking other things off his plate that allow him to have full time focus on Regulatory Operations.

22:59 - 23:08

Kaitlyn Kiernan: Just to switch gears a little bit. How might this increased focus on Reg Ops and coordinated oversight impact the firm experience?

23:09 - 24:13

Greg Ruppert: Our expectation, as well as our hope, is that these realignments and the focus on a coordinated approach is going to be better for firms. It's going to improve the firm experience, while at the same time we're still executing against our mission of investor protection as well as safeguarding markets. When I think about my past role, I would often see disconnect amongst the regulatory oversight. It takes a lot of resources from a firm's perspective to be able to address that when at times we're all pursuing the same goal, we all have the same expectations of where we want to end up, it sometimes gets confusing for firms. It sometimes risks the inability of firms not being able to prioritize the responses in terms of the risk priority. And so, from that, as we start to align on our side and are able to strategically address the interaction and the prioritization of a risk-based approach, hopefully it alleviates confusion or complexity or cross tasking on the firm's side.

24:14 - 24:23

Kaitlyn Kiernan: This renewed focus on integrated oversight is still in its early days. But are there any examples you can share so far about how it's working out?

24:24 - 26:04

Stephanie Dumont: One of my favorite examples, there are a lot of them, but one in particular is working with Greg's membership application program. We have market reg staff and Office of General Counsel is also engaged on this, is helping at the beginning of the membership process. With respect to the market and trading rules and the reporting rules, we found that that is often not a focus of new firms. They don't realize the full scope of CAT and trade reporting. And if you're going to be quoting there's some 211 requirements and so we start working with the MAP folks early on. So, the Market Reg folks are part of the initial discussions with the firms. So, they are able to explain these types of requirements to the firms early and understand whether that's something that impacts the firm and having expert staff on there to walk them through that.

And that is so positive in so many different ways because first, we're working with the firm ahead of time, so we don't have the problems downstream after they become a member. So, it's sort of a mini left of boom example there too because we're helping get at it early and making sure that the firms are compliant before they are actually approved for their membership. And then the firms that do have touch points in this space, now they have contacts in Market Reg, and they know who to go to and who to talk to if they have trade reporting issues, CAT issues, etc. They have a relationship now with that side of the reporting and other trading. So, it is just so beneficial in a number of ways.

26:05 - 29:02

Greg Ruppert: One of my favorite examples came up this year with the global crisis, particularly around Russia's invasion and war against Ukraine. And if we think about prior to going back, there was some initial concerns. There was speculation that Russia would invade, wouldn't invade. And it's really where our financial intelligence unit sprang into action and anticipated what could happen again. Left of boom, thinking about before the actual event and then leveraging the experience of what happens when there is a global crisis like that and the impact it has to markets, the impact it would have to member firms, the impact it has to investors and positioning us to be thinking about what should we anticipate and what should we be looking at.

And as we watch that play out throughout the entire time of this crisis that's still ongoing, it did have a market impact. There was an unprecedented level of sanctions, starting with the U.S. OFAC actions, but then world-based sanctions that impacted our membership and impacted markets and impacted issuers. And so from that standpoint, we sprang into action from a Reg Ops perspective looking across what we should be focused on, what the issues were going to be. And then our Risk Monitoring analysts that I alluded to prior to that, were reaching out directly to firms and asking firms what the impacts that they were seeing and anticipating with the sanctions. And that really allowed us to collect that information back to that centralized component and be able to engage with other regulators and other government agencies to really allow an industry perspective of what the industry was seeing and anticipating.

But even if we think further steps of where we were addressing what was coming out of the United States government in terms of reporting and risks around cyber threats and additional sanctions, we were able to, in an unprecedented manner, get information out to our membership through the various traditional channels that we've talked about, from Reg Notices to the Firm Gateway, but also unprecedented channels of leveraging sort of LinkedIn and attaching the messages to that so that people would be able to see that those feeds as they were coming in, sometimes off hours, sometimes over the weekend, and then taking our operational regulatory approach and then bringing that back into FINRA.

When you think about FINRA's internal mechanisms around the financials, the vendor relationships and then technology we saw even us potentially being at risk from cyber-attacks when it came to FINRA's systems, FINRA's websites, FINRA's data. So, we really have to be thinking as a coordinated unit. And from that standpoint, having us set up as Reg Ops gave one point of contact for what we were dealing with with firms, it just made it a one FINRA approach that became much more effective for Robert and the rest of our leadership team to be aware of on either daily or weekly basis as we were managing this crisis throughout the situation.

29:03 - 29:16

Jessica Hopper: That was an impressive, coordinated effort. And I look back at how we did in the meme stocks and how the experiences and the learnings that we took from that helped improve how we dealt with Russia, Ukraine issues.

29:17 - 29:20

Kaitlyn Kiernan: Awesome. And Jessica, did you want to give us an example from your side?

29:21 - 31:53

Jessica Hopper: Oh, of course. I think we're going to have to do another podcast of the examples, because I think Enforcement really is the beneficiary of that coordination in a lot more visible ways through the Enforcement actions and how much more timely, they can be and how much more impactful.

So, I think of a couple of things. First, I think of where enforcement really is primarily focused, which is on the investor protection. For excessive trading, let's say, or fraud. Or matters that really, really have significant harm to investors. This coordination has really improved on that, especially when we're dealing with firms who are not in the industry to get things right. They're really in the industry to take advantage of investors or to abuse the markets. And so that interaction between Market Regulation and Member Supervision and Enforcement is a lot more intentional. We have standing groups that do nothing but look at the information that we have around that. That work with the risk monitoring team, that understand how we can best deploy all of our teams to get to the right outcome.

And so, for Enforcement, if that means we are identified through our robust technology specific registered representatives who are taking advantage of investors, especially when they're taking advantage of senior investors, we're going to move quickly on that. While Greg's team looks at the firm more specifically, comes up with ways to address what the firm's misconduct is while it's happening. And Stephanie's team looks at the potential fraud that may be happening on the market. So, we really have it covered on all ends.

But the other area where Enforcement is visible is with new lines of business or new areas of interest. So, I think one area that came up was in crowdfunding. That was new to the industry. Enforcement wasn't the first stop there, obviously. Member Supervision worked a lot with the crowdfunding portals, especially in the front end, the membership application process. But as time went on and we had more interactions on the crowdfunding portals, we identified a couple that were such outliers in how they did the business and how they were not complying with the rules that were set up to protect the investors and to create a safe space in the crowdfunding area. So, we brought a couple of matters that were based on early referrals and by early referral I mean as soon as Member Supervision saw something that wasn't working well, we were there, and we worked closely with them to bring a timely action on a new area of business. So that's where I think we're seeing some good success stories. So many more to come and really excited about the future.

31:53 - 32:05

Kaitlyn Kiernan: Well, that's awesome. It's great to hear how this is already having an impact. So just to wrap up, how will you know when you've been successful? Is there ever really an end to this effort?

32:05 - 32:38

Jessica Hopper: No, I hope not. As long as the world continues to change, and we have such a dynamic industry that it will never stop changing. And because of that, we will never stop changing. And I think this whole podcast talks about that idea that we aren't content to just set something up and walk away. We want to make sure that we will be able to execute our mission to protect investors in the markets for a very long time. So, change is constant, I guess.

32:38 - 33:17

Kaitlyn Kiernan: Stephanie, Greg, Jessica, thank you so much for joining us for this episode of FINRA Unscripted. It's been great to hear about Reg Ops and the great work going on to ensure coordinated oversight between your three teams and listeners if you don't already, be sure to subscribe to FINRA Unscripted wherever you listen to podcasts to stay up to date on the latest coming out of all three of our Reg Ops groups. If you have any thoughts to share on today's episode or ideas for future episodes, you can email us at [email protected] Today's episode was produced by me Kaitlyn Kiernan and engineered by John Williams. Until next time.

33:18 – 33:23

Outro Music

33:23 - 33:51

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33:51 – 33:57

Music Fades Out

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