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.
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Author Bio
Leila Shaver is the Founder of My RIA Lawyer, a law firm that provides compliance and legal consulting for financial institutions. With extensive experience as a securities attorney and compliance expert, she has served as Chief Compliance Officer and General Counsel to RIAs, BDs, and TAMPs with billions in assets under management.
Leila understands the challenges RIAs face and is committed to helping RIAs streamline their processes, mitigate risks, and ensure compliance with regulatory requirements. She received her Juris Doctor from Atlanta’s John Marshall Law School and is a West Georgia Young Lawyers’ Association member. Leila has received numerous accolades for her work, including the Carroll County Bar Association’s Outstanding Young Lawyer Award in 2017.
