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84-17 Amendment to Association's Rules of Fair Practice
OFFICERS, PARTNERS AND PROPRIETORS
TO: All NASD Members and Interested Persons
LAST VOTING DATE IS APRIL 13, 1984
Attached is a proposed amendment to Article V, Section 1 of the Association's Rules of Fair Practice which has been approved by the Board of Governors for submission to the membership for a vote.
The proposed amendment to Article V, Section 1 of the Rules of Fair Practice would increase from $5,000 to $15,000 the maximum fine which may be assessed upon any member or person associated with a member. The proposed amendment is the result of a recommendation from the District Business Conduct Committees that the present $5,000 monetary limitation inhibits their ability to adequately redress violations of the Rules of Fair Practice. The present ceiling on fines of $5,000 was imposed as a result of a 1969 amendment to the Rules of Fair Practice. In the fifteen years since its adoption, however, the impact of a fine up to $5,000 has been eroded significantly by inflation.
Please mark the ballot according to your convictions and return it in the enclosed stamped envelope to "The Corporation Trust Company." Ballots must be postmarked not later than April 13, 1984.
The Board of Governors believes this amendment to the Rules of Fair Practice is necessary and appropriate to enable the District Business Conduct Committees and the Board of Governors to take appropriate remedial action. It is, therefore, recommended that members vote their approval.
Gordon S. Macklin
Penalties for Violation of the Rules
Sec. 1. Any District Business Conduct Committee, or the Board of Governors, in the administration and enforcement of these Rules, and after compliance with the Code of Procedure, may (1) censure any member or persons associated with a member and/or (2) impose a fine not in excess of
Five Thousand Dollars ($5,000.00) Fifteen Thousand Dollars ($15,000.00) upon any member or person associated with a member and/or (3) suspend the membership of any member or suspend the registration of a person associated with a member, if any, for a definite period, and/or (4) expel any member or revoke the registration of any person associated with a member, if any, and/or (5) suspend or bar a member or person associated with a member from association with all members, or (6) impose any other fitting penalty deemed appropriate under the circumstances, for each or any violation of any of these Rules by a member or person associated with a member or for any neglect or refusal to comply with any orders, directions or decisions issued by any District Business Conduct Committee or by the Board of Governors in the enforcement of these Rules, including any interpretative ruling made by the Board of Governors, as any such Committee or Board, in its discretion, may deem to be just; provided, however, that no such penalty imposed by any District Business Conduct Committee shall take effect until the period for appeal therefrom or review has expired, as provided in Section 14 of the Code of Procedure; and provided, further, that all parties to any proceeding resulting in a penalty shall be deemed to have assented to or to have acquiesced in the imposition of such penalty unless any party aggrieved thereby shall have made application to the Board of Governors for review pursuant to the Code of Procedure, within fifteen (15) days after the date of such notice.