FINRA revised its Sanction Guidelines to reflect, among other things, developments in FINRA's disciplinary process and the levels of sanctions imposed during proceedings.
According to FINRA Regulatory Notice 17-13, the revisions provide (i) additional consideration for financial exploitation of vulnerable customers, (ii) new guidelines concerning systemic supervisory failures, short-interest reporting, and borrowing and lending arrangements with customers, and (iii) guidance on the potential mitigating effect of sanctions imposed by other regulators or firm-imposed sanctions. FINRA also modified the non-monetary and monetary range of sanctions for several guidelines that involve "more serious violations of FINRA rules," and made similar changes to guidelines regarding violations that involve unauthorized transactions.
FINRA stated that the purpose of the Sanction Guidelines is not to provide predetermined sanctions for violations, but rather to give adjudicators a range of appropriate sanctions for a particular violation and let the adjudicators consider aggravating and mitigating factors in order to arrive at a sanction based on the relevant circumstances. FINRA initiated the review through the National Adjudicatory Council, which is FINRA's appellate tribunal for disciplinary cases. The revised guidelines are effective immediately.
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