- Revisions to the Sanction Guideline Related to Fraud, Misrepresentations or Material Omissions of Fact
For reckless or intentional fraud the new Sanction Guidelines “eliminates the guidance that individuals should merely be “considered” for a bar in egregious cases. The revision states Adjudicators should “strongly consider” barring an individual”. Similar amendments were made addressing firms.
- Revisions to the Sanction Guideline Related to Suitability – Unsuitable Recommendations
The guideline was amended to “increase the high-end of the suspension from one year to two years and to “strongly consider” barring an individual respondent where aggravating factors predominate the respondent’s misconduct” for unsuitable recommendations by individuals.
- Revisions to the General Principles Applicable to All Sanction Determinations, Nos. 1 and 2
The amended General Principle No. 1 advised Adjudicators to consider imposing higher sanctions than recommended to “achieve deterrence, and not a mere cost of doing business.” General Principle No. 2 has been amended to advise adjudicators to impose “progressively escalating sanctions” on individuals and firms with disciplinary history.These changes reflect the predominant mentality among Adjudicators that harder penalties are required to deter wrongdoing. It is strongly recommended that firms examine their Written Supervisory Procedures in light of these revisions to ensure compliance and avoid harsh penalties.For more information on this and other related subjects, please contact us at firstname.lastname@example.org(619) 298-2880.