In an effort to improve protection of senior investors, the U.S. Financial Industry Regulatory Authority Inc. (FINRA) has revised its guidance to explicitly include the age and vulnerability of victims as factors in setting sanctions for misconduct.
FINRA’s National Adjudicatory Council (NAC) updated the principal considerations in its penalty guidelines to consider a customer’s age (whether they are over 65) and physical or mental impairments that could prevent them from protecting their own interests.
“The amendments reflect the NAC’s concerns regarding protecting customers and the NAC’s explicit consideration of elder abuse as well as its general experience with imposing more stringent sanctions in cases involving senior investors or mentally impaired customers,” FINRA said in a notice.
The changes follow FINRA’s review of the effectiveness of its rules and processes when it comes to protecting senior investors from financial exploitation.
The sanction guidelines are intended to help adjudicators in disciplinary proceedings set appropriate penalties for violations of the self-regulatory organization’s rules by providing a range of sanctions for particular violations, along with certain aggravating and mitigating factors.
“As with other considerations in the sanction guidelines, adjudicators should take a principles-based approach to assessing if the rule violations have more impact on elderly or impaired customers, including the customer’s ability to recover from sustaining financial losses,” FINRA said.