FINRA Enforcement Overhaul: 24 Recommendations Target Rule 8210, Wells Process, Settlements
Broker-dealer compliance and litigation teams should track FINRA's pending adoption of 24 expert recommendations reshaping Rule 8210 requests, Wells submissions, cooperation credit, and AWC transparency.
FINRA's outside experts delivered a 24-recommendation report under the FINRA Forward initiative, covering eight areas from governance to settlements. The most consequential changes for member firms include: a neutral decision-maker forum to challenge overly broad Rule 8210 requests; pre-issuance consultation and senior-level approval for information requests; enhanced Wells procedures featuring reverse proffers, immediate access to on-the-record testimony, and post-Wells meetings with enforcement leadership; a published enforcement manual modeled on the SEC's; expanded Rapid Remediation and expedited resolution of technical violations; broader cooperation credit not requiring 'extraordinary' efforts; and AWC reforms including Mitigation Statements, transparent sanction calculations, and curbing Rule 2010 'tag-along' charges. FINRA CEO Robert Cook signaled a deliberate, holistic review. Firms should reassess Wells response playbooks, document cooperation efforts, and prepare for potential Rule 8210 challenges while monitoring FINRA's implementation timeline.