Overview of the Process
The regulatory mission of FINRA is to protect investors and strengthen market integrity through vigorous, even-handed, and cost-effective self-regulation. As part of FINRA's regulatory mission, it must stand ready to discipline member firms and their associated persons by imposing sanctions when necessary and appropriate to protect investors, other member firms and associated persons, and to promote the public interest.
The National Adjudicatory Council (NAC), formerly the National Business Conduct Committee, has developed the FINRA Sanction Guidelines for use by the various bodies adjudicating disciplinary decisions, including Hearing Panels and the NAC itself (collectively, the Adjudicators), in determining appropriate remedial sanctions. Respondents also may use these guidelines in crafting settlements, acknowledging the broadly recognized principle that settled cases generally result in lower sanctions than fully litigated cases to provide incentives to settle.
These guidelines do not prescribe fixed sanctions for particular violations. Rather, they provide direction for Adjudicators in imposing sanctions consistently and fairly. The guidelines recommend ranges for sanctions and suggest factors that Adjudicators may consider in determining, for each case, where within the range the sanctions should fall or whether sanctions should be above or below the recommended range. These guidelines are not intended to be absolute. Based on the facts and circumstances presented in each case, Adjudicators may impose sanctions that fall outside the ranges recommended and may consider aggravating and mitigating factors in addition to those listed in these guidelines.
In order to promote consistency and uniformity in the application of these guidelines, the NAC has outlined general principles applicable to all sanction determinations that should be considered in connection with the imposition of sanctions in all cases.
Call the Soreide Law Group today to discuss your legal rights. We defending clients in investigations and litigation before the, Financial Industry Regulatory Authority (FINRA), the Office of Hearing Examiners (OHO), the National Adjudicatory Council (NAC) and the U.S. Securities and Exchange Commission (SEC). Call 888-760-6552 or email email@example.com. Please feel free to continue to read further about this process.
FINRA employs a system for disciplining firms and individuals who break the rules. They may take disciplinary action through a settlement, or issue a formal complaint. If a complaint is issued, the case is heard before a panel which is chaired by a professional hearing officer and includes two industry representatives.
At the hearing, the parties present evidence for the Hearing Panel to evaluate in determining whether a firm or individual has engaged in conduct that violates FINRA rules, the federal securities laws, or SEC regulations. The Hearing Panel also considers previous court, SEC, and FINRA's National Adjudicatory Council (NAC) decisions to determine whether violations occurred. The Hearing Panel uses the FINRA Sanction Guidelines to determine appropriate sanctions, and issues a written decision explaining the reasons for its ruling.
A firm or individual has the right to appeal a Hearing Panel decision to the NAC, a body that is equally balanced between individuals who are in the securities business and nonindustry representatives. Unless FINRA's Board of Governors decides to review the NAC's decision, that decision is FINRA's final action in the matter. A firm or individual can appeal FINRA's action to the SEC and then to a federal court.
FINRA’s disciplinary proceedings are governed by the NASD Code of Procedure (the Code). You should consult the Code to obtain a complete picture of your rights and responsibilities in the disciplinary process. In addition, FINRA’s Office of Hearing Officers has prepared a Guide to Disciplinary Hearing Procedures (the Guide), which gives a description of the disciplinary process. FINRA’s rules, including the Code, are available at http://www.finra.org/rules. The Guide is available at www.finra.org/OHO. You may also request that the Office of Hearing Officers send you copies of the Code and Guide if you do not have access to FINRA’sWeb site.
CLICK THE AREA OF INTEREST BELOW FOR MORE INFO: