The U.S. Financial Industry Regulatory Authority (FINRA) has revised the sanctions guidelines that the National Adjudicatory Council (NAC), its appeal tribunal, utilizes to include “a new principal consideration that contemplates coverage for financial exploitation of vulnerable individuals or individuals with diminished capacity.”
The guidelines, which were last updated in May 2015, have also been revised to include three new sections relating to systemic supervisory failures, borrowing and lending arrangements, and short interest reporting. In addition, the guidance concerning sanctions that other regulators have imposed also been revised to allow that this may be considered as a mitigating factor.
The revised guidelines stem from an NAC review to ensure that they “reflect recent developments in the disciplinary process, comport with changes in FINRA’s rules and accurately reflect the levels of sanctions imposed in FINRA disciplinary proceedings.”
The guidelines do not set out fixed sanctions for particular violations. Instead, they are intended to help hearing panels and the NAC impose appropriate sanctions consistently and fairly in disciplinary proceedings.