Chapter 9.7

Question 1

Code of procedure

Answer 1

Established to handle trade practice complaints addressing proceedings for:

• Disciplining a member or person associated with a member
• Regulating the activities of a member experiencing financial or operational difficulties
• Summary or non-summary suspensions, cancellations, bars, prohibitions, or limitations; and
• Obtaining relief from the membership eligibility requirements of the FINRA By-Laws and FINRA rules

**For violations of rules FINRA can censure, fine, suspend, or bar a member firm or persons associated with a member firm

Question 2

Jurisdiction for hearing complaints against a FINRA member

Answer 2

• Department of enforcement or department of market regulation: Will establish a hearing panel. The hearing panel must issue a written opinion within 60 days of the end of the hearing. The respondent has 25 days to appeal the opinion to the National Adjudicatory Council
• National Adjudicatory Council: Is the national committee that reviews initial decisions rendered in FINRA disciplinary and membership proceedings. The Council can affirm, modify, reverse, increase, or reduce any sanction or impose any other sanction it believes is appropriate. It’s decisions may be appealed to the SEC
• The SEC is the final level of regulatory appeal. The SEC’s decision may then be taken to federal court
• The maximum penalty that a hearing panel can impose for Minor Rule Violations for members and dual members is censure and/or a fine of $2,500.

Question 3

When must FINRA be notified if a RR is suspended by any regulatory Authority?

Answer 3

Promptly

Question 4

FINRA will release to the public information concerning the following disciplinary decisions:

Answer 4

• The suspension or revocation of a person associated with a Member firm
• The suspension or barring of a member or a person associated with a member firm from association with all other member firms
• The imposition of a monetary penalty of $10,000 or more on a member firm or a person associated with a member firm

**FINRA has no jurisdiction over Insurance, Commodities, or residential real estate transactions

Question 5

Inspection of documents by the respondent

Answer 5

A respondent is permitted to request and review documents that pertain to the complaint brought by FINRA. A respondent can review:

• Written requests directed to persons not employed by FINRA to provide documents or to be interviewed
• Documents provided in response to requests described in #1
• All transcripts and transcript exhibits
• All other documents obtained from persons not employed by FINRA

**The respondent is not entitled to request information or documentation that has not been presented as evidence in the complaint