FINRA Updates Sanction Guidelines by Eliminating Suggested Fine Cap

Posted on October 18th, 2022 at 2:19 PM
FINRA Updates Sanction Guidelines by Eliminating Suggested Fine Cap

From the Desk of Jim Eccleston at Eccleston Law.

The Financial Industry Regulatory Authority (FINRA) has updated its sanction guidelines used to determine the level of fines or penalties to impose on firms and their financial advisors.

However, the changes are primarily symbolic because the guidelines served only as an outline of potential penalties and typically was not closely followed, according to sources familiar with the matter. For instance, FINRA’s September 2022 guidelines removed a suggested upper limit of $310,000 on fines. Nevertheless, FINRA has regularly imposed fines in excess of that amount, such as a record $70 million penalty against Robinhood Financial.

Furthermore, FINRA is increasing the minimum fine amount to $5,000 and designing separate rules to adjust fines based on firm size. For example, when a firm has failed to properly supervise an advisor’s outside business activity (OBA), FINRA recommends that a small firm ought to pay fines between a range of $5,000 and $77,000. On the other hand, FINRA suggests that a midsize or large firm should pay between $10,000 and $200,000. The revised guidelines should address “pet peeves” of small firms that were being unfairly grouped in with larger firms, according to sources familiar with the matter.

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

Tags: eccleston, eccleston law, advisors, law, finra

Return to Archive

TESTIMONIALS

Previous
Next

Thank you so very much for your guidance, patience, and expertise.

Beth and Steve K.

LATEST NEWS AND ARTICLES

October 29, 2025
FINRA Foundation Study Reveals Alarming Investor Susceptibility to Fraudulent Offers

The FINRA Investor Education Foundation (FINRA Foundation) has released preliminary findings from its upcoming report, Investors in the United States: A Report of the National Financial Capability Study.

October 28, 2025
UBS Seeks Court Order Against $1.4 Billion Florida Advisory Team Over Client Solicitation Allegations

UBS Wealth Management USA has filed a lawsuit and requested a temporary restraining order (TRO) against a $1.4 billion advisory team that recently departed to join Elevation Point, a West Palm Beach-based registered investment advisor launched just 15 months ago.

October 27, 2025
FINRA Panel Orders Charles Schwab to Pay Damages Over Structured Product Losses Sold by Vora Wealth Management

A three-person FINRA arbitration panel ordered Charles Schwab & Co. to pay $165,440 in compensatory damages to a former client of Vora Wealth Management, after losses tied to complex structured products.