KMF agreed to finance the purchase and Respondent therefore provided KMF with a promissory note for the entire purchase price, secured by the purchased building.  

I can easily imagine that Breeze believed that he was not "borrowing" money from a client but engaging in a commercial real estate transaction involving secured financing by the seller.  It was not the clear intent of Rule 2370 (the "Borrowing Rule") to cover such a transaction -- the focus was to prevent the direct borrowing/lending between clients and RRs.  While I understand and appreciate that the Borrowing Rule should/could cover the transaction set forth in Breeze, I think that we need to also appreciate that most RRs (and many of their legal counsel) might not recognize the applicability of the Borrowing Rule to this set of facts.

Ultimately, yeah, okay, when Breeze's firm discovered the deal they should have advised him that it was likely subject to the Borrowing Rule and immediately require that he submit written notice.  And, again, sure, the Firm might have been entitled to send Breeze a letter of admonition that he had violated the Firm's internal policy by not not submitting prior written notice and that such action may also be deemed to be in violation of FINRA rules.  However, I see little reason to impose a 60-day suspension and a $5,000 fine for such a slip up.  Since there is no statement in the AWC that Breeze knowingly sought to conceal the transaction as part of a wilful effort to violate the Borrowing Rule, this is one of those situations where nothing more than a letter of admonition from FINRA seems necessary.  

It is this type of case that raises concerns about so-called self-regulatory "speed trap" approaches to regulating and underscores my commitment to highlight such sanctions when I beleive that they serve no purpose other than to fill the regulator's coffers.