IV. Financial and Operational Practices [Version up to May. 1, 2018]

• Customer Confirmations—Failure to Comply With Rule Requirements

• Customer Protection Rule—Failure to Comply With Rule Requirements

• Net Capital Violations

• Recordkeeping Violations

• Regulation T and Margin Requirements—Violations of Regulation T and/or FINRA Margin Requirements

Customer Confirmations—Failure to Comply With Rule Requirements

SEC Rule 10b-10¹ and NASD Rule 2230

Principal Considerations in Determining Sanctions	Monetary Sanction	Suspension, Bar or Other Sanctions
*See Principal Considerations in Introductory Section* 1. Nature and materiality of the inaccurate or missing information. 2. Number of affected confirmations.	*First Action* Fine of $1,000 to $7,000. *Second Action* Fine of $5,000 to $15,000. *Subsequent Actions* Fine of $10,000 to $146,000.	*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 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. 1 This guideline is also appropriate for violations of MSRB Rule G-15.

Customer Protection Rule—Failure to Comply With Rule Requirements

FINRA Rule 2010 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 the respondent exposed customer funds to potential risk or loss.	Fine of $1,000 to $73,000. 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

FINRA Rule 2010 and SEC Rule 15c3-l

Principal Considerations in Determining Sanctions	Monetary Sanction	Suspension, Bar or Other Sanctions
*See Principal Considerations in Introductory Section* 1. Whether the 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 $73,000.	*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

FINRA Rule 2010, NASD Rule 3110 and SEC Rules 17a-3 and 173-4¹

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.	Fine of $1,000 to $15,000. In egregious cases, fine of $10,000 to $146,000.	*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. 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 FINRA Rules 2010 and 4210

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 $73,000. 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.