Sanction Guidelines Revised

FINRA, through the National Adjudicatory Council (NAC), has reviewed and revised the Sanction Guidelines to ensure they reflect recent developments, changes in FINRA rules and the levels of sanctions imposed in FINRA disciplinary proceedings.

 

NEW GUIDANCE

 

  • New principal consideration that examines whether a respondent has exercised undue influence over a customer- reaffirms financial exploitation of senior and other vulnerable customers should result in strong sanctions
  • Supervision and systemic supervisory failures- new guideline applies to violations related to systemic supervisory failures and firm wide supervisory problems
  • Short interest reporting- There is a unique set of factors that short interest reporting violations typically present and principal considerations have been added to address such unique factors.
  • Borrowing from or lending to customers- new guidelines have been added to provide guidance on the assessment of sanctions in these areas.
  • Consideration of regulator or firm-imposed sanctions- Action taken by another regulator for the same conduct is now a potentially mitigating circumstance. The conduct at issue before the other regulator must be essentially identical and any fine has already been paid fully, suspension fully served and any other sanction has been satisfactorily completed. Mitigative weight should also be placed on firm-imposed sanctions.

EXISTING SANCTION GUIDELINES

 

The range of sanctions for more serious violations of FINRA rules has been modified. For example, the high-end suspension range for churning and unauthorized transactions for an individual has increased from 1 year to 2 years. For a complete list of revisions, click here.

 

CONTACT US

 

Are you under investigation and facing sanctions? We have extensive experience in defending registered representatives and broker-dealers. Call us today.