The purpose and effect is to clarify when the Office may consider mitigating and aggravating circumstances in determining an appropriate sanction for each violation of a ground for disciplinary action, to implement Chapter ....

 

DEPARTMENT OF FINANCIAL SERVICES

Securities

RULE NO.:RULE TITLE:

69W-1000.001Disciplinary Guidelines

PURPOSE AND EFFECT: The purpose and effect is to clarify when the Office may consider mitigating and aggravating circumstances in determining an appropriate sanction for each violation of a ground for disciplinary action, to implement Chapter 2024-168, Laws of Florida, and to update the Disciplinary Guidelines incorporated in the rule.

SUMMARY: The purpose and effect is to clarify when the Office may consider mitigating and aggravating circumstances in determining an appropriate sanction for each violation of a ground for disciplinary action, to implement Chapter 2024-168, Laws of Florida, which amended the administrative penalty provisions of chapter 517, F.S., and to update the Disciplinary Guidelines incorporated in the rule.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: The Agency expressly relies on an analysis of potential economic impact conducted by persons with subject matter knowledge of these rules.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 517.1611(1) FS.

LAW IMPLEMENTED: 517.111, 517.121, 517.161, 517.1202, 517.1611(1), 517.191(4), 517.221(3), (4) FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN THE FAR.

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Ryann White, Office of General Counsel [phone], [e-mail].

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

69W-1000.001 Disciplinary Guidelines.

(1) Pursuant to Section 517.1611, F.S., disciplinary guidelines applicable to each ground for which disciplinary action may be imposed by the Office against an individual or a firm under Chapter 517, F.S., are hereby adopted. The disciplinary guidelines are contained in the Office of Financial Regulation Disciplinary Guidelines for Chapter 517, Florida Statutes (F.S.) and Division 69W, Florida Administrative Code (F.A.C.) (effective XX-XX 03-24), which is hereby incorporated by reference. A copy of the disciplinary guidelines may be obtained by mail from the Florida Office of Financial Regulation, Division of Securities, 200 E. Gaines Street, Tallahassee, Florida 32399, or may be obtained electronically through the following website: http://www.flrules.org/Gateway/reference.asp?No=Ref-XXXXX http://www.flrules.org/Gateway/reference.asp?No=Ref-16513 or available from the Office at https://flofr.gov/sitePages/documents/Matrix.pdf.

(2) Each violation of any provision of Chapter 517, F.S., or the rules adopted under the rulemaking authority of Chapter 517, F.S., constitutes a ground for disciplinary action by the Office. The level of sanction imposed for each violation of a ground for disciplinary action is reflected in the disciplinary guidelines. In determining an appropriate sanction for each violation of a ground for disciplinary action, the Office may shall consider the circumstances set forth in subsection (5).

(3) through (4) No change.

(5) In accordance with Section 517.1611(1)(a), F.S., the Office may will consider the following mitigating and aggravating circumstances in determining whether to impose a penalty other than that specified in the disciplinary guidelines the appropriate level of sanction within the range of sanctions prescribed in this rule for each violation of a ground for disciplinary action:

(a) through (w) No change.

(6)(a) In accordance with Section 517.1611(1)(b), F.S., the Office will consider the circumstances in subsection (5), when determining whether a deviation from the range of sanctions prescribed in the disciplinary guidelines is warranted.

(7)(a) The fines imposed on a natural person for violation of a ground for disciplinary action are up to $5,000 $2,000 for a level “A” fine, $5,001 $2,001 to $10,000 $5,000 for a level “B” fine, $10,001 $5,001 to $15,000 $7,500 for a level “C” fine and $15,001 $7,501 to $20,000 $10,000 for a level “D” fine. The mitigating and aggravating circumstances provided in subsection (5), may be applied to the fines imposed for violation of a ground for disciplinary action resulting in a range of fines of up to $2,000 for a level “A” fine, $2,001 to $5,000 for a level “B” fine, $5,001 to $7,500 for a level “C” fine and $7,501 to $10,000 for a level “D” fine.

(b) The fines imposed on a business entity for violation of a ground for disciplinary action are up to $6,250 for a level “A” fine, $6,251 to $12,000 for a level “B” fine, $12,001 to $18,750 for a level “C” fine, and $18,751 to $25,000 for a level “D” fine.

(c) (b) A Notice of Noncompliance shall be a statement issued by the Office as described in Section 120.695, F.S. For the purpose of this rule, a Notice of Noncompliance is not considered an occurrence of a violation.

(d) (c) A previous “occurrence” is the same or similar misconduct which was the subject of a Final Order entered by the Office prior to the acts or omissions which are the subject of the current action by the Office.

(7) (8) The ranges for suspensions imposed by this rule are up to 5 days for an “A” level suspension; 6 to 30 days for a “B” level suspension; and, over 30 days for a “C” level suspension. A business day is defined as a day the major stock exchanges are open. Suspensions of 30 or fewer days are measured in business days while a suspension of 31 or more days is measured in calendar days. The mitigating and aggravating circumstances provided in subsection (5), may be applied to the suspensions imposed for violation of a ground for disciplinary action resulting in a range of suspension of up to 5 days for an “A” level suspension; 6 to 30 days for a “B” level suspension; and over 30 days for a “C” level suspension.

(8) (9) In addition to the provisions of this rule, the Office may, when appropriate, seek civil remedies including the entry of an injunction, the appointment of a receiver by a court of competent jurisdiction, or any other remedy authorized by law.

Rulemaking Authority 517.1611(1) FS. Law Implemented 517.111, 517.121, 517.161, 517.1202, 517.1611(1), 517.191(4), (9), and (10), 517.221(3), (4) FS. History–New 11-22-10, Amended 11-14-13, 5-6-15, 11-15-16, 12-10-19, 1-18-21, 3-21-24,                .

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Alisa G. Goldberg, Director, Division of Securities

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Financial Services Commission

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: June 12, 2024

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: June 20, 2024