Sen. Elizabeth Warren is pressing the national broker-dealer regulator, Finra, on its claim that success in driving bad actors out of the industry explains why enforcement numbers have fallen in recent years.

Fines imposed by the Financial Industry Regulatory Authority have halved recent levels and the number of enforcement actions last year was the lowest on record, Bloomberg News reported in June. The regulator attributed the decline to improved rules and strategies to weed out repeat offenders.

“The new report appears to indicate that the decline in enforcement is part of a deliberate deregulatory effort,” Warren said in a letter to Finra on Wednesday.

The Massachusetts Democrat said the enforcement slowdown coincided with the so-called Finra 360 program, launched seven years ago to make the regulator more “effective and efficient.”

This effort saw the integration of two different enforcement divisions into the markets watchdog. It was intended to streamline investigations and information sharing and “enable the organization to vigorously and fairly enforce applicable rules,” Finra spokesman Ray Pellecchia said in an email.

Warren asked Finra to explain what policy changes were made as a result of that initiative.

“Any suggestion that FINRA360 had the effect of reducing the number of enforcement actions is simply wrong,” Pellecchia said, adding that such accusations would carry more weight if the industry did not continue to blast Finra's enforcement moves.

Industry leaders have complained that regulators' enforcement function “is causing unnecessary and excessive costs and uncertainty,” Ann Wagner, a Missouri Republican and senior member of the House Financial Services Committee, said at a hearing. in December.

Finra banned 3,640 individuals and expelled 130 firms from its membership between 2014 and 2023, according to Pellecchia. Those expulsions included high-risk firms as well as related individuals that had been subject to multiple disciplinary actions, moves that would help explain the drop in enforcement actions, Pellecchia said.

“Other high-risk firms withdrew from our membership following significant regulatory attention,” Pellecchia said. During that period, the regulator's enforcement actions resulted in $377.9 million ordered to be returned to injured investors, he said.