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May 12, 2015 at 04:58 PM
The Financial Industry Regulatory Authority said Tuesday that it will call for tougher sanctions for those who commit fraud or make unsuitable recommendations to clients. Plus, it will increase suspensions under the self-regulator’s suitability rules from one year to two years.
FINRA said that its National Adjudicatory Council is amending its “overarching principles” that apply to sanctions determinations and is revising its Sanction Guidelines to advise FINRA adjudicators to “strongly consider” barring an individual respondent or expelling a firm for cases involving fraud.
For individuals who violate FINRA’s suitability rule, the range of the suspension has increased from one year to two years, and FINRA states that adjudicators are advised to “strongly consider barring an individual respondent where aggravating factors predominate over mitigating ones.”
FINRA released the revised Sanction Guidelines, which are effective immediately, in Regulatory Notice 15-15. The NAC, FINRA’s appellate tribunal for disciplinary case, first published the Sanction Guidelines in 1993 to familiarize member firms with some of the typical securities industry rule violations that occur and the range of disciplinary sanctions that may result from such violations.
The NAC is a 14-member committee composed of equal numbers of industry and non-industry members.
