[N]ewport has waived any challenge to the findings of violations. Since the hearing panel issued its decision, Newport has raised only constitutional and procedural objections and objections to the appropriateness of expelling it from FINRA membership. Newport did not challenge the findings of violations when it appealed the hearing panel's decision to the NAC, and it does not challenge the findings of violations on appeal to the Commission. Under the circumstances, we hold that Newport has waived any arguments regarding the findings of violations or the appropriate sanctions except with respect to its expulsion from FINRA membership. Nonetheless, consistent with our standard of review discussed above, we review FINRA's findings of violations before considering the expulsion. 

Newport's senior management knew about red flags surrounding its representatives' trading. They received exception reports from Newport's clearing firms showing that the trading in Leone's, La Barbera's, Levy's, and Costanzo's customers' accounts repeatedly exceeded specified thresholds. Indeed, Newport's chief compliance officer ("CCO") testified that he knew about Leone's, La Barbera's, Levy's, and Costanzo's excessive trading and the firm's failure to respond. For example, he admitted that he knew Leone was excessively trading customers' accounts and that he never directed Arena or the trading desk to stop Leone from doing so. Nor was he aware of any other member of Newport's management that did so. 

The CCO also explained that, although Newport placed its representatives on heightened supervision in May 2012 in response to FINRA's investigation, he did not order the firm's compliance department to review or investigate those representatives' customer accounts. He reasoned that "there weren't any secrets about what was taking place with these" registered representatives, that Newport's then-CEO "was fully cognizant of what was going on," and that he didn't "know what it would have accomplished other than to paper some files, but I don't think it would have resulted in any changes." The CCO testified further that Newport had received numerous customer complaints about La Barbera, Costanzo, and Levy and that he informed the firm's CEO about them. But the CCO had no ability to limit the trading of these representatives or terminate them because, according to him, Newport's CEO "ruled with an iron fist" and "there wasn't anything that was said or done without her approval." The CCO acknowledged that Newport's supervisory structure "was less than adequate." 

[N]ewport abused its customers' trust and confidence by excessively trading and churning their accounts and by making qualitatively unsuitable recommendations. These were not isolated incidents; rather, they were repeated, years-long securities law violations committed against more than twenty customers by multiple representatives and across multiple offices.

Newport's failure to respond to indications that misconduct was occurring was especially egregious. Exception reports repeatedly identified red flags about its representatives' trading, but the firm took no action in response. Indeed, the firm's CCO testified that Newport received numerous customer complaints about La Barbera, Costanzo, and Levy and that the firm's CEO prevented him from disciplining them. Newport's inaction harmed its customers by imposing unnecessary commissions, markups, and markdowns from excessive trading and churning. The firm benefited financially from this misconduct by retaining a portion of the commissions, markups, markdowns, and its customers suffered substantial losses. 

Regardless of whether Newport would seek to reenter the industry, moreover, expelling the firm provides additional important protections for investors. Specifically, an expulsion triggers FINRA Rule 3170 ("the Taping Rule"). The Taping Rule requires certain member firms to record all telephone conversations with existing and prospective customers if a certain percentage of the firm's registered persons have been employed by a firm "that, in connection with sales practices involving the offer, purchase, or sale of any security, has been expelled from membership or participation in any securities industry self-regulatory organization or is subject to an order of the SEC revoking its registration as a broker-dealer." In approving the Taping Rule, we found that its provisions would "discourage the revival of disciplined firms that have been barred by the industry or that have had their registrations revoked by the Commission."  We explained that, "[i]n essence, firms that decide to hire significant numbers of employees from disciplined firms will be required to ensure a proper supervisory environment that protects investors and prevents fraudulent and manipulative telemarketing acts and practices." Thus, the purpose of the Taping Rule is remedial and not punitive as was FINRA's determination on this record that it was necessary to expel Newport (which could trigger the rule).

Newport argues that expulsion is punitive because it may trigger the Taping Rule for some of its former representatives who move to another firm but who may not have engaged in misconduct. Expulsion and the Taping Rule are no less remedial in this situation. We have noted previously that, under the Taping Rule, "[t]he monitoring of registered persons' telephone conversations will help to provide additional supervision of individuals who formerly worked at a disciplined firm where they were inadequately trained and supervised." Indeed, as discussed above Newport has a history of deficient supervision. We thus find that expelling Newport protects investors should Newport seek to reenter the industry and, because expulsion triggers the Taping Rule, regardless of whether Newport should ever seek to reenter the industry.

unfairly singled out for enforcement action when others who were similarly situated were not and that the applicant's prosecution was motivated by improper considerations such as race, religion, or the desire to prevent the exercise of a constitutionally protected right. Here, there is no evidence substantiating Newport's claim that FINRA unfairly singled out the firm for investigation or enforcement based on any of those grounds. Newport provides only broad, unsupported generalities about what it claims is the unequal prosecution of small and large firms. That is not an adequate basis for us to conclude that FINRA's expulsion of the firm resulted in inappropriately disparate treatment. 

Nor can Newport succeed under the Equal Protection Clause on a "class-of-one" theory, under which someone who is not a member of a protected class nonetheless may assert an equal protection claim by showing that he or "she has been intentionally treated differently from others similarly situated and that there is no rational basis for the difference in treatment." The Supreme Court held in Engquist v. Oregon Department of Agriculture that a class-of-one claim is not cognizable in the context of activities or decisions that "by their nature involve discretionary decisionmaking based on a vast array of subjective, individualized assessments." Because self-regulatory organization "disciplinary proceedings are treated as an exercise of prosecutorial discretion," and "Engquist precludes [class-of-one] challenges to prosecutors' decisions about whom, how, and where to prosecute," Newport's claim fails as a matter of law. Newport's claim also fails because those asserting such a claim "must show an extremely high degree of similarity between themselves and the persons to whom they compare themselves"- something that Newport has not done. 

Newport contends further that its expulsion is inappropriately disproportionate because "[t]he big firms, most of which have hundreds of disclosures, simply pay a fine no matter how egregious the conduct" and asks why, here, the two "direct line supervisors were only suspended but somehow an entire firm has to be expelled?" As discussed above, Newport does not identify a litigated proceeding involving a "big firm" that was found liable for excessive trading, churning, qualitatively unsuitable recommendations, and failures to supervise and that resulted in disproportionate sanctions to those at issue here. As for the two supervisors to whom Newport compares its sanction, they settled their proceedings. We have observed repeatedly that " 'comparisons to sanctions in settled cases are inappropriate.' "