On May 2, the Financial Industry Regulatory Authority announced revisions to its Sanction Guidelines that will instruct disciplinary adjudicators to consider customer-initiated arbitrations resulting in adverse arbitration awards or settlements when assessing sanctions.
The Sanction Guidelines currently explain that a respondent’s sanctions should be higher if the respondent’s disciplinary history is similar to the misconduct in the current case or evidences a “reckless disregard for regulatory requirements, investor protection, or market integrity.” The revised guidelines will now require adjudicators to consider both disciplinary history and customer-initiated arbitrations that result in adverse arbitration awards or settlements when evaluating a respondent’s background.
The revised Sanction Guidelines take effect for all complaints filed in FINRA’s disciplinary system beginning on June 1. The Sanction Guidelines are available here.