On June 30, 2026, the Financial Industry Regulatory Authority (FINRA or the Authority) published a report prepared by two outside experts — Professor Paul R. Eckert of William & Mary Law School and former Securities and Exchange Commission (SEC) Commissioner Troy A. Paredes of Paredes Strategies — setting forth 24 recommendations for improving FINRA’s enforcement program. The report, commissioned as part of FINRA’s broader “FINRA Forward” initiative, reflects a comprehensive evaluation of FINRA’s enforcement policies, procedures, processes, and practices, informed by feedback from various stakeholders including member firms, counsel, and FINRA leadership at multiple levels.
FINRA announced in July 2025 that it had engaged Messrs. Eckert and Paredes to identify and assess opportunities for the enforcement function to better serve FINRA’s self-regulatory mission. Among other areas, they were asked to consider governance, policies, processes, and communications, as well as how FINRA enforcement works with other FINRA departments and federal and state regulators. FINRA President and CEO Robert Cook has committed to “drawing on these recommendations to strengthen [its] enforcement program, make necessary changes, and ensure it is operating in a fair, transparent, and effective manner,” while acknowledging that due to the “breadth and complexity of the recommendations,” implementation will take time. FINRA’s Board of Governors has been briefed on the report and will be monitoring FINRA’s approach to the recommendations.
Key Findings and Recommendations
The report’s 24 recommendations address governance, due process, transparency, information requests, timeliness, and the resolution of enforcement actions. Several stand out as particularly consequential for member firms.
Investigation and Information Requests. The report calls for enhanced policies governing Rule 8210 requests, including centralized tracking to avoid duplicative requests, senior-level approval, pre-issuance consultation with member firms regarding scope and timing, and avoidance of inappropriate practices such as contention interrogatories or seeking privileged information. Critically, the report recommends that FINRA adopt a procedural mechanism allowing member firms to challenge Rule 8210 requests perceived as inappropriate in scope or unreasonably burdensome — adjudicated by a neutral decision-maker. Regarding on-the-record testimony, the report recommends limiting sworn testimony to matters warranting that level of formality, limiting attendance to a reasonable number of enforcement staff, and adopting a pro-release presumption for transcripts.
Limitations Periods. Perhaps most notably, the report recommends that FINRA adopt limitation periods. Where alleged violations are tied to the federal securities laws, the report suggests that FINRA should observe the corresponding limitations periods. For other violations, the report recommends a general five-year limitation period, with certain exceptions for scienter-based fraud or manipulative conduct involving customer loss.
Wells Process and Due Process. The report recommends updates including encouraging “reverse proffers” and “open jacket” practices so that potential respondents are apprised of the staff’s views on facts, law, and proposed sanctions; providing access to testimony transcripts immediately upon communication of a Wells notice; setting Wells deadlines of no fewer than 30 days; and welcoming post-Wells meetings with enforcement leadership.
Settlements and Resolution. The report urges FINRA to revise and publish updated cooperation-credit guidance, dropping the requirement that cooperation be “extraordinary” to warrant credit and clarifying that credit is available on a sliding scale. It recommends limiting “tag-along” Rule 2010 charges, clarifying that the National Adjudicatory Council (NAC) Sanction Guidelines (rather than prior settlement precedent) should anchor penalty negotiations, and expanding the Minor Rule Violation Plan. The report also recommends that FINRA update its policies to avoid enforcement actions that are duplicative of efforts by the SEC, Commodity Futures Trading Commission (CFTC), Financial Crimes Enforcement Network (FinCEN), Department of Justice (DOJ), or state regulators — focusing on whether a FINRA action would be “additive.”
Transparency. The report recommends that FINRA publish an enforcement manual, publish enforcement workflows showing the internal lifecycle of a matter, and improve the accessibility and searchability of disciplinary materials on third-party legal research platforms.
Practical Takeaways
The report represents a meaningful step toward addressing longstanding concerns about the fairness, efficiency, and proportionality of FINRA’s enforcement program. If implemented in substantial part — and early indications suggest FINRA is receptive — the recommendations would materially change how member firms receive, negotiate, challenge, and resolve FINRA inquiries.
Importantly, the report does not, standing alone, change FINRA’s rules or enforcement practices. But it provides immediate practical value. Firms with ongoing enforcement matters should consider whether the principles underlying these recommendations can be incorporated into current discussions with enforcement staff. For example, firms may now have additional support to push back on overbroad Rule 8210 requests, seek meaningful cooperation credit for self-reporting and remediation, and advocate for expedited resolution of technical matters where there is no customer harm.
More broadly, the report signals a cultural shift in how FINRA views its enforcement function within the broader regulatory ecosystem — one oriented toward proportionality, transparency, and efficient resource allocation. Member firms and their counsel should familiarize themselves with the report’s recommendations and be prepared to invoke them in appropriate circumstances. This is an area to continue to monitor.
