The Financial Industry Regulatory Authority announced that its National Adjudicatory Council is revising its sanction guidelines to create new fine ranges for firms and individuals, Think Advisor reports.
The guidelines set out the ranges of disciplinary sanctions issued for some of the typical securities rules violations, and serve as a framework for settlement negotiations between FINRA’s Department of Enforcement and member firms or individuals.
The newly announced revisions will adjust the sanctions by splitting each current guideline into separate guidelines for individuals and firms, creating separate fine ranges for small and mid-size or large-size firms, and removing the upper limit of the fine ranges for mid-size and large-size firms for select guidelines.
Whereas mid-sized and large-size firms previously faced a maximum fine of $310,000 for certain violations, the fines for those violations will now be open-ended. $5,000 was established as the minimum for all firm fines, to acknowledge that FINRA does not routinely settle disciplinary matters with firms, other than minor rule violations, for less than $5,000.
FINRA said the revisions will more accurately reflect the levels of sanctions imposed in the authority’s disciplinary proceedings, and will be a resource for firms, individuals and adjudicators.
“The changes to the Sanction Guidelines align the sanctions to where FINRA’s Enforcement program has evolved,”said Jessica Hopper, Executive Vice President and Head of FINRA’s Department of Enforcement. “The Sanction Guidelines also bolster FINRA’s mission of protecting investors by reflecting how grave violations of FINRA’s rule will result in serious sanctions.”
The National Adjudicatory Council said the improvements in the guidelines were designed to address the more common violations committed by firms and individuals over the years. The NAC is FINRA’s appellate tribunal for disciplinary cases and is composed of a total of 15 industry and non-industry members.
The changes were outlined by FINRA in its Regulatory Notice 22-20 and became effective immediately.
Financial professionals who work for broker-dealers, RIAs or other financial service companies operate in a highly regulated industry that is overseen by the SEC, state regulators and other self-regulatory organizations such as FINRA and various exchanges. If you are the subject of a regulatory proceeding, contact Lewitas Hyman at (888) 655-6002 or through our online contact form for a free consultation.
