Outside experts appointed by the Financial Industry Regulatory Authority have delivered a sweeping set of recommendations aimed at reshaping how the regulator handles enforcement actions against member firms.
The report, published on June 30, 2026, was prepared by Professor Paul R. Eckert of William & Mary Law School and former Securities and Exchange Commission Commissioner Troy A. Paredes of Paredes Strategies.
FINRA commissioned the review as part of its broader “FINRA Forward” initiative, with the two experts formally engaged in July 2025 to assess the enforcement function.
The evaluation drew on feedback from member firms, legal counsel, and FINRA leadership at multiple levels, resulting in 24 discrete recommendations spanning governance, due process, transparency, and timeliness.
One of the more notable proposals concerns Rule 8210 information requests, with the report calling for centralised tracking to prevent duplicative demands and senior-level approval before any request is issued.
The experts also recommend that FINRA introduce a formal procedural mechanism allowing member firms to challenge Rule 8210 requests, a significant shift that would give respondents a concrete avenue to contest overly broad or burdensome demands.
On the Wells process, the report urges FINRA to encourage “reverse proffers” and “open jacket” practices so that potential respondents are fully informed of staff views on facts, law, and proposed sanctions before proceedings advance.
The report further recommends that Wells deadlines be set at no fewer than 30 days, that testimony transcripts be provided immediately upon communication of a Wells notice, and that post-Wells meetings with enforcement leadership be actively welcomed.
Regarding settlements, the experts urge FINRA to revise its cooperation-credit guidance, dropping the requirement that cooperation be “extraordinary” to warrant credit and clarifying that credit is available on a sliding scale.
The report also recommends limiting so-called “tag-along” Rule 2010 charges and clarifying that National Adjudicatory Council Sanction Guidelines, rather than prior settlement precedent, should anchor penalty negotiations.
To address longstanding concerns about case delays, the report proposes creating a start-to-finish matter-tracking system that would keep respondents regularly informed of their case status throughout the enforcement lifecycle.
On testimony practices, the report calls for sworn on-the-record interviews to be reserved for matters warranting that level of formality, with attendance limited to no more than three enforcement staff members as a target.
The experts also recommend that enforcement staff avoid active attendance and participation in pre-referral exams and reviews absent exigent circumstances, to prevent routine examinations from taking on an adversarial character.
At the governance level, the report proposes creating a committee of senior leaders to identify and escalate issues across the enforcement lifecycle, alongside an enhanced role for FINRA’s chief executive in enforcement matters and settlement decisions.
In one of its most structurally significant proposals, the report recommends that FINRA adopt a formal five-year statute of limitations for most alleged violations, with exceptions carved out for cases involving fraud or continuing misconduct.