On May 2, FINRA issued a notice revising its Sanction Guidelines to reflect recent changes to General Principle No. 2, which instructs adjudicators “to consider customer-initiated arbitrations that result in adverse arbitration awards or settlements” in addition to the more traditional disciplinary history when assessing sanctions. FINRA Regulatory Notice 18-17 states that if an adjudicator determines that a “pattern of causing harm” to investors or market integrity exits, or a respondent demonstrates a disregard to regulatory requirements, then more stringent sanctions should be considered. New FAQs related to the revisions are available here.
Revisions to the Sanctions Guidelines will apply to all complaints filed in FINRA’s disciplinary system beginning June 1.