Finra Changes Sanction Guidelines to Protect Older Adults

By Alex Padalka October 27, 2020

Finra says it has revised guidelines on sanctions in a bid to better protect older adults.

The industry self-regulator’s Sanction Guidelines are aimed at helping its adjudicators determine appropriate sanctions in disciplinary proceedings, according to a regulatory notice Finra published last week.

After a review of the guidelines in place, Finra’s National Adjudicatory Council amended the section dubbed “Principal Considerations in Determining Sanctions,” changing one of the 19 considerations “to explicitly include whether the customer had a mental or physical impairment that rendered him unable to protect his or her own interest,” Finra says.

Furthermore, Finra also added a 20th principal consideration, on whether the customer in question is 65 or older, according to the guidance.

“Adjudicators should consider the facts and circumstances of the case and the type of violation when deciding whether the customer’s age and mental or physical impairment should be considered an aggravating factor when assessing the appropriate sanction for a violation,” Finra says.

The guidelines are effective immediately, according to the guidance.

Finra has been revamping its operations to better protect senior investors in recent years. Earlier this month, the industry’s self-regulator also proposed a rule change that would extend the hold periods firms can place on accounts suspected of financial exploitation as well as allow temporary holds on securities transactions and not just the disbursements allowed under the current rule.

In December 2019, Finra CEO and president Robert Cook said that some broker-dealer firms had asked the industry’s self-regulator to give them more power over temporary holds, as reported.

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