The Public Investors Advocate Bar Association (PIABA) expressed concerns about FINRA's Remote Inspections Pilot Program, launched last July, arguing it jeopardizes investor protection. The program allows member firms to fulfill inspection duties remotely, without the rigorous scrutiny of on-site visits. PIABA President Adam Gana emphasized that remote inspections could exacerbate the existing deficiencies in supervision, which may lead to increased misconduct, including sales abuses. Rather than reducing inspection depth, Gana advocates for enhanced requirements to safeguard investors against potential regulatory evasion and abuse.
"What FINRA should be doing is adding more robust inspection requirements instead of limiting them," he told Advisor Upside. "We've seen regularly over the last 10 years a lack of sufficient supervision necessary to protect investors."
FINRA's voluntary, three-year Remote Inspections Pilot Program allows for eligible member firms to meet their inspection obligations without on-site visits.
Instead of going onsite to an advisor's office, opening up cabinets and saying 'What's in there? Tell me about this document? What is this check on your desk?' [FINRA] just talks to an advisor remotely.
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