CFP Board Announces New Sanction Guidelines

The Board of Directors of Certified Financial Planner Board of Standards, Inc. (CFP Board)  has announced, effective August 27, 2012,  the adoption and  implementation of  new Sanction Guidelines.

Typically, the CFP Board’s enforcement process involves them investigating incidents of alleged unethical behavior using  procedures established by the CFP Board’s Disciplinary Rules and ProceduresWhen violations are found, the CFP Board can impose discipline ranging from a private letter of censure or public admonition to suspension or revocation of the right to use the CFP®  mark. 

In the past, the differences in punishment meted out for those violating CFP’s rules haven’t always represented a model of consistency.  Presumably, the new guidelines will  assist the Disciplinary and Ethics Commission (DEC), the group that conducts disciplinary hearings under the  CFP Board’s rules,  in doing just that.  Similar to FINRA’s approach, the CFP Board’s sanction guidelines includes a chart featuring recommended sanctions for violations that cover everything from bankruptcy, to borrowing money from a client to unauthorized use of  the CFP®  mark.  The chart also includes a column or category entitled “Policy Notes” or factors that the DEC, and if appealed, may also be used by the Appeals Committee of the Board of Directors which considers appeals of DEC decisions.

 

 

Author: Dexter Johnson

The author is a an attorney who for the past 14 years has concentrated his practice in representing, successfully, investment advisers, broker-dealers, corporations and individuals who are subject to SEC, FINRA, State or other regulations and who may be the subject of regulatory examination, review or investigation. He formerly worked at the SEC. His regulatory and litigation experience has encompassed virtually every type of securities issue in the industry. He has also negotiated favorable outcomes in many of these matters for his clients.