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VI. Improper Use of Funds/Forgery [Version up to Mar. 22, 2011]

Conversion or Improper Use of Funds or Securities

FINRA Rules 2010 and 21501, and NASD Rule 2330 and IM-2330

Principal Considerations in Determining Sanctions Monetary Sanction Suspension, Bar or Other Sanctions
See Principal Considerations in Introductory Section Conversion2

(No fine recommended, since a bar is standard.)

Improper Use

Fine of $2,500 to $50,000.
Conversion

Bar the respondent regardless of amount converted.

Improper Use

Consider a bar. Where the improper use resulted from the respondent's misunderstanding of his or her customer's intended use of the funds or securities, or other mitigation exists, consider suspending the respondent in any or all capacities for a period of six months to two years and thereafter until the respondent pays restitution.

1 This guideline also is appropriate for violations of MSRB Rule G-25.

2 Conversion generally is an intentional and unauthorized taking of and/or exercise of ownership over property by one who neither owns the property nor is entitled to possess it.


Forgery and/or Falsification of Records

FINRA Rule 2010

Principal Considerations in Determining Sanctions Monetary Sanction Suspension, Bar or Other Sanctions
See Principal Considerations in Introductory Section
1. Nature of the document(s) forged or falsified.
2. Whether the respondent had a good-faith, but mistaken, belief of express or implied authority.
Fine of $5,000 to $100,000. In cases where mitigating factors exist, consider suspending respondent in any or all capacities for up to two years. In egregious cases, consider a bar.

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