If this only happened once or so, I wouldn't get that annoyed; but FINRA seems to have a penchant for sort of glossing over the fact that the SEC modifies or reverses the self-regulator's findings of fact or the imposition of sanctions. 

If you read FINRA's version of the case following its appeal to the SEC, you would have no idea that there were any modifications of the self-regulator's sanctions -- frankly, I find that troubling.  It is paramount that there be integrity throughout the regulatory system and it just doesn't strike me as appropriate for one regulator to game the system or put a spin on the facts.  FINRA brought a case against these respondents and the findings of fact were sustained throughout the hearing and subsequent two levels of appeal (to the NAC and to the SEC). However, it is also clear that the SEC modified the sanctions imposed by FINRA. 

Regardless of whether such a modification is minor or major, it is an important outcome on appeal and FINRA should always be meticulous in noting when the SEC modifies or reverses any aspect of its rulings. To simply state, as FINRA typically does, a given set of sanctions and to then note that the  "Securities and Exchange Commission (SEC) imposed the sanctions following appeal of a FINRA National Adjudicatory Council (NAC) decision," does not accurately present the cited SEC decision. While it is technically correct to state that the "SEC imposed the sanctions" (since FINRA is reporting the SEC's sanctions on appeal) it is equally imperative that FINRA note, when applicable, if the sanctions imposed by the SEC represented increases, decreases, or modifications of the sanctions imposed earlier by FINRA.

The SEC's synopsis of the appeal states http://www.sec.gov/litigation/opinions/2009/34-61135.pdf:

Registered broker-dealer, its co-chief executive officer, and its head trader manipulated price of security sold to public investors. Broker-dealer's co-chief executive officer also improperly signed customers' names to transactional documents. Broker-dealer and head trader breached obligation of best execution. Held, association's findings of violation are sustained, and the sanctions imposed are modified.

More substantively, the SEC's describes this case as follows:

Kirlin Securities, Inc., formerly a broker-dealer registered with FINRA ("Kirlin" or the "Firm"); Anthony Kirincic, Kirlin's co-chief executive officer; and Andrew Israel, Kirlin's head equity trader, appeal from FINRA disciplinary action. FINRA found that Kirlin, Kirincic, and Israel (together, "Applicants") manipulated the stock price of Kirlin's publicly-traded parent company, Kirlin Holding Corporation ("KILN"), and thereby violated Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 thereunder, and NASD Conduct Rules 2120 and 2110. FINRA expelled Kirlin from FINRA membership and barred Kirincic and Israel in all capacities for these violations. FINRA also found that Kirincic violated NASD Rule 2110 by falsifying the signatures of his parents on several stock certificates and letters of authorization to facilitate the manipulative scheme, for which FINRA imposed another bar in all capacities. Finally, FINRA found that Kirlin and Israel failed to provide best execution to a customer who sought to sell KILN stock during the manipulation, in violation of NASD Rule 2110, and ordered them to pay, jointly and severally, restitution to the injured customer. We base our findings on an independent review of the record.

Ultimately, the SEC modified the sanctions imposed by FINRA as follows:

ORDERED that the findings of violation by FINRA against Kirlin Securities, Inc., Anthony Kirincic, and Andrew Israel be, and they hereby are, sustained; and it is further

ORDERED that the bar imposed by FINRA on Anthony Kirincic for fraudulent manipulation of the market in violation of Exchange Act Section 10(b), Exchange Act Rule 10b-5, and NASD Conduct Rules 2120 and 2110 be, and it hereby is, sustained; and it is further

ORDERED that the bar imposed by FINRA on Anthony Kirincic in connection with improperly signing customer names to transactional documents in violation of NASD Conduct Rule 2110 be, and it hereby is, set aside; and it is further

ORDERED that the expulsion from FINRA membership imposed on Kirlin Securities, Inc. for fraudulent manipulation of the market in violation of Exchange Act Section 10(b), Exchange Act Rule 10b-5, and NASD Conduct Rules 2120 and 2110 be, and it hereby is, sustained; and it is further

ORDERED that the bar imposed on Andrew Israel for fraudulent manipulation of the market in violation of Exchange Act Section 10(b), Exchange Act Rule 10b-5, and NASD Conduct Rules 2120 and 2110 be, and it hereby is, set aside; and it is further

ORDERED that Andrew Israel be barred from associating in any capacity with a FINRA member firm with a right to apply for re-entry after five years from February 25, 2009; and it is further

ORDERED that the restitution order, in the amount of $26,163 plus interest, imposed by FINRA jointly and severally on Andrew Israel and Kirlin Securities, Inc. for failing to provide best execution in violation of NASD Conduct Rule 2110 be, and it hereby is, set aside.