Broker-Dealer Beat - May 2015

FINRA Introduces Revised Sanction Guidelines

FINRA has published updated and revised Sanction Guidelines that, among other things, highlight the SRO's position that penalties in disciplinary actions should be significant enough to achieve deterrence and not serve merely as a cost of doing business. The Sanction Guidelines were last revised in 2011. These latest revisions come on the heels of criticism, including remarks by a member of the SEC, that FINRA's penalties too often have been financially insignificant for wrongdoers.

The purpose of the Sanction Guidelinesis to assist adjudicators – hearing panels and the National Adjudicatory Council (NAC) – in determining appropriate penalties for violations of FINRA rules. The Guidelines also should inform the FINRA staff in crafting settlements with member firms. In order to promote consistency and uniformity, the Guidelines set out certain overarching principles to be considered in connection with the imposition of