She Overhauled FINRA’s Enforcement. Here’s What Susan Schroeder Is Tackling Next.
The attorney is returning to an old stomping ground.
The attorney who designed and spearheaded major changes to enforcement at the Financial Industry Regulatory Authority has joined a New York private practice with familiar faces.
After an eight-year stint at FINRA, Susan Schroeder has returned to WilmerHale, the international law firm with more than 1,000 lawyers. She is vice chair of the firm’s Securities Department and responsible for helping manage and grow the practice alongside Department Chair William McLucas and Deputy Chair Daniel M. Gallagher.
“It was natural for me to think long and hard about WilmerHale as an option,” Schroeder told RIA Intel.
Schroeder was a partner at WilmerHale before she left to join FINRA in 2011. She was promoted to head of the Enforcement Department in 2017, reported directly to FINRA President and CEO Robert Cook, and consolidated the department of 340 employees and unified its priorities.
FINRA is a self-regulatory organization and was created when NASD and NYSE Regulation merged more than 10 years ago. It regulates broker-dealers and provides surveillance, trade reporting, and other regulatory services for equities and options markets in the U.S. The organization is overseen by the Securities and Exchange Commission.
Among other changes to her department, Schroeder created a centralized group to review settlement documents. Without it, details of settlement agreements could differ between FINRA’s offices and potentially send mixed messages from enforcement. “The two words that the enforcement team heard me say about a million times were consistency and transparency,” Schroeder said.
After implementing her plan for FINRA’s enforcement, Schroeder announced her departure from the organization in September last year. She did not publicly reveal her return to WilmerHale until this week.
“It seemed like the right time. I was so proud of what we had done in enforcement. I had accomplished what I had set out to do,” Schroeder said.
Anyone who thinks a return to private practice means Schroeder will be leveraging her experience and connections to help bad actors off the hook has seen too many episodes of Showtime’s “Billions.” Clients of WilmerHale will benefit from her experience and deep understanding of regulators’ priorities, which they should adjust to accordingly, she said.
Financial advisors should be sure they understand their own firm’s communication about the coming regulatory changes. Last summer, the SEC’s Regulation Best Interest, or Reg BI, laid out rules that enhanced compliance and disclosure, best practices to avoid conflicts of interest, and mandated reasonable care when advisors make recommendations. Consumer advocates and the industry – especially RIAs held to a fiduciary standard – argued the SEC’s changes didn’t go far enough.
But rules in place are only part of the story. How they will be interpreted by regulators and others during enforcement remains to be seen. Reg BI goes into effect June 30.
“It will be an interesting year or two of seeing how the SEC begins to enforce the rule,” Schroeder said.
Those changes will help keep her busy at WilmerHale but she’s still hoping to spend more time on her motorcycle, especially now that her daughter’s older.
“That means more time to ride.”