FINRA to Toughen Sanctions on Repeat Violators
May 3, 2018 By Melanie Waddell, ThinkAdvisor The revised Sanction Guidelines also tell adjudicators to consider arbitration actions filed by clients against a broker. The Financial Industry Regulatory Authority is revising its Sanction Guidelines to instruct adjudicators in the disciplinary process to consider “customer-initiated arbitrations” that result in adverse arbitration awards or settlements when assessing sanctions. The broker-dealer self-regulator also advises adjudicators in Regulatory Notice 18-17 to impose “progressively escalating sanctions” on repeat violators to deter future misconduct. As it stands now, FINRA’s Sanction Guidelines instruct that a respondent’s disciplinary history should trigger higher sanctions when that disciplinary history: (a) is similar to the misconduct in the current disciplinary case; or (b) evidences a “reckless disregard for regulatory requirements, investor protection, or market integrity.” The newly revised guidelines adds a section instructing adjudicators to consider “customer-initiated...
