Customer Protection Rule—Failure to Comply with Rule Requirements
NASD Conduct Rule 2110 and SEC Rule 15c3-3

Principal Considerations In Determining Sanctions

Monetary Sanction

Suspension, Bar, or Other Sanctions

See Principal Considerations In Introductory Section

1. Extent to which respondent exposed customer funds to potential risk or loss.

Fine of $1,000 to $50,000.

Repeated violations should carry individual fine for Financial Principal and/or responsible supervisor.

Firm

Consider suspending the firm with respect to any or all activities or functions for up to 30 business days.

In egregious cases, consider a lengthier suspension (of up to two years) or expulsion of the firm.

Individual

Consider suspending the Financial Principal or responsible party in any or all capacities for up to 30 business days.

In egregious cases, consider a lengthier suspension (of up to two years) or a bar.

Net Capital Violations
NASD Conduct Rule 2110 and SEC Rule 15c3-1

Principal Considerations In Determining Sanctions

Monetary Sanction

Suspension, Bar, or Other Sanctions

See Principal Considerations In Introductory Section

1. Whether firm continued in business while knowing of deficiencies/inaccuracies or voluntarily ceased conducting business because of the deficiencies/inaccuracies.

2. Whether respondent attempted to conceal deficiencies or inaccuracies by any means, including "parking" of inventory and inflating "mark-to-market" calculations.

Fine of $1,000 to $50,000.

Firm

Consider suspending the firm with respect to any or all activities or functions for up to 30 business days.

In egregious cases, consider a lengthier suspension (of up to two years) or expulsion of the firm.

Individual

Consider suspending the Financial Principal or responsible party in any or all capacities for up to 30 business days.

In egregious cases, consider a lengthier suspension (of up to two years) or a bar.

Recordkeeping Violations
NASD Conduct Rules 2110 and 3110 and SEC Rules 17a-3 and 17a-4¹

Principal Considerations In Determining Sanctions

Monetary Sanction

Suspension, Bar, or Other Sanctions

See Principal Considerations In Introductory Section

1. Nature and materiality of inaccurate or missing information.

Associated Person

Fine of $1,000 to $10,000.

In egregious cases, fine of $10,000 to $100,000.

Firm

Consider suspending the firm with respect to any or all activities or functions for up to 30 business days.

In egregious cases, consider a lengthier suspension (of up to two years) or expulsion of the firm.

Individual

Consider suspending the Financial Principal or responsible party in any or all capacities for up to 30 business days.

In egregious cases, consider a lengthier suspension (of up to two years) or a bar.

¹ This guideline also is appropriate for violations of MSRB Rules G-8 and G-15.

Regulation T and Margin Requirements-—Violations Of Regulation T and/or FINRA Margin Requirements
Regulation T; Part 220 Issued By The Board Of Governors Of The Federal Reserve Board and Conduct Rules 2110 and 2520

Principal Considerations In Determining Sanctions

Monetary Sanction

Suspension, Bar, or Other Sanctions

See Principal Considerations In Introductory Section

1. Extent and nature of the respondent's failure to comply.

Fine of $1,000 to $50,000.

Repeated violations should carry an individual fine for the responsible individual.

Firm

Consider suspending the firm with respect to any or all activities or functions for up to 30 business days.

In egregious cases, consider a lengthier suspension (of up to two years) or expulsion of the firm.

Individual

Consider suspending the responsible individual in any or all capacities for up to 30 business days.

In egregious cases, consider a lengthier suspension (of up to two years) or a bar.