The so-called “hearing discount.” Which is a bit counter-intuitive since in most settings, settlements result in more benign sanctions (because by settling, the respondent is saving the other side from having to prepare the complaint and then prepare for and attend the hearing, all of which takes a lot of time and effort). Something that Brian’s study typically reveals is a fact well known to lawyers who defend Enforcement cases, but which is surprising to everyone else: respondents often – certainly not all the time, or even most of the time – actually do better – in terms of sanctions – by going to hearing. (It’s a labor intensive analysis, inasmuch as FINRA’s (rejected) settlement offer is not public information, so Brian has to call lawyers and cajole them to share that information on an anonymous basis.) That is, did they end up getting harsher or more lenient sanctions as a result of rejecting FINRA’s offer and going to hearing. One of the hard parts of his analysis is his effort to figure out how respondents who elected to take their case to hearing, as opposed to settling, fared. It is an excellent tool, and eagerly anticipated by lots of us who practice in this industry. My friend and former colleague, Brian Rubin, publishes annually his analysis of FINRA Enforcement cases, spotting trends in terms of the number and types of matters it brings, the sanctions meted out, etc.
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