Pete Tepley was part of a panel for a Knowledge Group, LLC webinar discussing the implications of the Financial Industry Regulatory Authority (FINRA)’s Sanction Guidelines and examined best practices to prevent risks and pitfalls.

The May 2018 amendments to the Sanction Guidelines revamped the assessment of sanctions in disciplinary proceedings. Under the revisions, customer arbitration history should be taken into consideration by adjudicators when determining the severity of disciplinary sanction to be imposed. The revisions cover disciplinary complaints filed beginning June 1, 2018.

During the webinar, Tepley addressed these questions:

• Which arbitration awards and arbitration settlements can be considered for heightened sanctions for recidivists?
• What information about those awards and settlements is to be considered and what issues does this raise?
• When does an individual’s Disciplinary and Arbitration History warrant the consideration of imposing more severe sanctions?
• What pattern(s) are applicable for imposing heightened sanctions and how are they to be determined?    

Some key points Tepley addressed during the webinar:

• In defending a heightened sanctions attempt based on an alleged pattern, focus on things that weigh against finding a pattern such as length of time between events.
• Depending on what takes place as the new guidelines are implemented, it may be necessary to try and go beyond what is said about an arbitration award on the CRD and use the actual awards themselves for situations where various claims were made and it is not clear from an unexplained award what the arbitration panel actually found.

If you’re interested in listening to the full event, visit: https://knowgroup.org/2LsLLkN