Rule 2010 is the disciplinary rule that FINRA uses to sanction brokers for bad faith or unethical “business-related” misconduct. The line between personal and business activity is not always clear, particularly where brokers are accused of misconduct in connection with their personal bank accounts. Two cases last year grappled with the limits of Rule 2010, both times finding that the misconduct was sufficiently business-related to justify sanctions. These cases are another reminder of Rule 2010’s sweeping reach.

Rule 2010

Rule 2010 provides in full: “A member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade.” The rule is meant to be a catch-all provision aimed at protecting customers by ensuring that securities professionals are honest and ethical.

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