The National Adjudicatory Council’s (NAC) of Wall Street’s self-policing body Financial Industry Regulatory Authority (FINRA) has unveiled new Sanctions Guidelines introducing stricter penalties against securities brokerages and individual brokers who commit fraud or violate suitability rules.
The revised Sanction Guidelines, effective immediately, advise FINRA adjudicators to consider barring an individual respondent, or expelling a firm, for cases involving fraud.
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The revision has also increased the range of the suspension for individuals, who violate FINRA’s suitability rule to sell products that are not suitable to retail investors, from one year to two years.
In addition, FINRA’s new guidelines will in increase the amounts of monetary sanctions by indexing them to the Consumer Price Index (CPI).
The adjustment, retroactive to 1998, will apply across the board to the highest ends of monetary ranges that FINRA sets for various types of violations.
FINRA will continue to use the CPI to readjust its monetary sanction guidelines every three years.
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By GlobalData
