State regulators like William Galvin in Massachusetts and New York Attorney General Eric Schneiderman regularly make headlines for their oversight of broker-dealers and advisors and their actions against brokers who behave badly.

The story is quite different in California, where regulators – the Department of Business Oversight - issued a brief report showing that, for fiscal year ended 6/30/16, only about 1% of the state's roughly 24,430 investment advisor firms, broker-dealers and branch offices were examined.

• 6% (or 232) of the roughly 3,740 IA firms in the Golden State  were examined.
• 0.8% of the 2,900 B/D firms in California were examined.
• Under 0.1% of all branch offices were examined.

Interestingly, that’s an increase over 2015, when the office examined only 0.3% of the state’s 24,720 licensed securities entities.

According the DBO, which is led by Commissioner Jan Lynn Owen, of its 269 exams, 10 cases were referred to its enforcement division for license revocation due to violations. The other 259 exams identified various violations for which the licensees took corrective action to bring themselves into compliance.

All told, California’s Department of Business Oversight has 66 employees and 7 open positions - 47 staff members are assigned to examinations, while 7 do licensing, and 19 handle program support. Based on current information, it’s estimated that at least 256 additional examiners would be needed “to meet expected 4-year examination cycle requirements.”