In the past, however, NASD Regulation enforced suspensions in cases in which sanctions were not stayed pending Circuit Court appeals. Thus, while NASD Regulation refrained from billing respondents for fines imposed in NASD disciplinary cases pending appeal to Circuit Courts of Appeal, it imposed suspensions and requalification requirements in the very same cases. This method ensures investor protection by enforcing bars and expulsions while fairly providing respondents with the opportunity to pursue appeals without the threat of the enforcement of other sanctions. Legally, NASD Regulation can enforce sanctions absent a stay while a matter is pending appeal in a Circuit Court of Appeals. NASD cannot return suspension time to an individual or a member firm if the findings are reversed, so the individual or firm loses that time in the industry.
Consistency is important in the area of enforcement of sanctions.
Since NASD Regulation refrains from collecting fines and revoking respondents for failing to pay fines while an appeal is pending in a Circuit Court of Appeals, it is inconsistent to require that those same respondents serve suspensions while a matter is pending appeal. Although ideally NASD Regulation receives timely notice of all stay orders, since it is not always noticed as a party to Circuit Court appeals, there is a danger that timely notice may not be forthcoming. The SEC readily grants stay requests when matters are pending appeal in a Circuit Court of Appeals. In many cases, a stay already is in effect, so this policy change should not drastically alter the current state of affairs with respect to the enforcement of sanctions. NASD Regulation believes that this policy change will ensure the fair and efficient treatment of all disciplinary respondents with respect to the enforcement of sanctions pending Circuit Court appeals.