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Financial Industry Regulatory Authority broker-dealer member firms and registered securities professionals successfully argued for fine reductions in about 70% of FINRA disciplinary proceedings, according to a new Sutherland Asbill & Brennan study. The authority’s hearing panel trimmed staff proposed fines by nearly 40%, from about $30,000 to $19,000. Firms involved in FINRA proceedings were also able to reduce suspension times in 56% of cases, from an average of 9.2 months to 3.4 months, and to reduce an industry bar to an average suspension of 14.5 month in 48% of cases. Although member firms are successful in garnering fine and suspension reductions, they’re less successful in getting charges dropped. FINRA-appointed hearing panels ruled in FINRA’s favor 90% of the time and 78% of the time when the case involved a member company. Registered securities professionals convinced the hearing panel to dismiss charges in only about 5% of cases. Sutherland attorney Brian Rubin, a Washington-based partner who was formerly deputy chief counsel of enforcement for FINRA’s predecessor organization, said many firms and registered securities professionals are reluctant to fight FINRA charges because the organization has typically spent months or years on its investigation the conduct. “Our study continues to show that it often pays for member firms and registered representatives to litigate, rather than settle,” Rubin said. Sutherland analyzed cases filed from January 2006 through June 2007, that involved charges of violations of National Association of Securities Dealers rules and U.S. Securities and Exchange Commission rules and statutes.

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