Securities Law Blog

FINRA recently announced that it has created a Panel to screen enforcement cases before they are filed, called the Disciplinary Advisory Committee (“DAC”). According to a report in the Wall Street Journal, Jim Shorris, executive director of FINRA enforcement, said “It gives the staff an opportunity to hear about significant cases”. Once an enforcement team finishes an investigation, it presents the case to a committee of around a dozen senior managers, according the WSJ report. The committee can then suggest amending the charges, allow the case to proceed, or send it back for more “legwork”, among other things. The Office of Disciplinary Affairs provides another level of review by vetting settlement agreements before they are finalized. According to the report, the DAC came to FINRA from NYSE regulation via FINRA enforcement chief Susan Merrill.