Regulatory Notice 15-15

The National Adjudicatory Council (NAC) Revises the Sanction Guidelines Related to Misrepresentations and Suitability

Effective Immediately

Executive Summary

The NAC has revised the Sanction Guidelines related to misrepresentations and suitability. Specifically, the revisions:

  • modify the guidelines related to fraud to advise adjudicators to strongly consider barring an individual respondent for intentional or reckless fraud, and expelling a firm where aggravating factors predominate the firm’s misconduct;
  • modify the guidelines related to suitability to advise adjudicators to strongly consider barring an individual respondent where aggravating factors predominate the respondent’s misconduct and ordering expulsion of a firm in egregious cases;
  • emphasize that FINRA’s disciplinary sanctions should be designed to protect the investing public by deterring misconduct and upholding high standards of business conduct;
  • reiterate FINRA’s longstanding position that sanctions in disciplinary cases should be more severe for recidivists;
  • index the high-end of the monetary sanctions to the Consumer Price Index starting from 1998; and
  • reflect the new FINRA rule numbers for rules that have been adopted into the consolidated FINRA rulebook.

The revised Sanction Guidelines are effective immediately and available on FINRA’s website.

Questions regarding this Notice should be directed to:

  • Alan Lawhead, Vice President, Office of General Counsel, at (202) 728-8853; and
  • Jante Turner, Assistant General Counsel, Office of General at (202) 728-8317.