The Financial Industry Regulatory Authority, Inc. (FINRA) is a private organization that is self-regulatory within a wide array of industries (pretty much all of them). Financial advisors have a responsibility to account for their firm’s spending and accounting, and when they fail to do this they can find themselves the focus of Rule 8210 notice from FINRA. It’s one of the most dreaded notices you can receive from any regulatory body, and if you’ve just received notice that they’re going to start an inquiry into your conduct as a financial advisor, you’re likely stressed out and afraid. It’s a subpoena, and it’s not optional, so you ARE facing a situation where you’re going to need a lawyer as soon as possible. This isn’t something anyone should face alone.
If you’ve received this notice, it’s natural to wonder what you did to trigger this kind of investigation. Most folks think they’re doing a fine job until they receive something that says they’re being investigated to the degree that they’re requesting personal AND business documents. Some of the things that they might start an investigation over would include strange activity on client accounts, a customer complaint, or a firm you once worked for tipping them off that you might have engaged in misconduct during your time with them. None of these things are pleasant to be accused of, and it’s natural to respond with anger, bitterness, and fear. This is a serious thing. A lawyer is always the first person you want to call, and SPODEK LAW GROUP is full of lawyers who have the experience you need to overcome legal issues like this. It’s one of our many areas of expertise.
The first thing an advisor will get is the Rule 8210 notice telling you that they’re doing an informal inquiry. This means you don’t have to report anything about this inquiry on your FORM U4, and so you’ve not been formally charged with anything and it won’t hurt your current work as an advisor. It DOES mean that they’re investigating whether or not you violated securities or industry rules and regulations. This is THE point where you want the investigation to conclude. Facing a formal investigation is going to be nerve racking and you will have to report this on your Form U4. This can be detrimental to your career.
FIRNA is going to do a few things during an informal inquiry. They’ll send interrogatories and documents. This falls under the part of the Rule that is called “Provision of Information and Testimony and Inspection and Copying of Books.” Please be advised that yes, this is an intimidating string of words and a bunch of legal jargon here that you may not understand. You’re a financial advisor, so this is outside your scope of expertise. The people to call in to explain things like this to you: SPODEK LAW GROUP. With over 40 years of experience defending people being informally AND formally investigated by FIRNA, we know exactly how to handle these situations and stop an investigation early, before it escalates.
Remember: You HAVE to respond to this part of the rule! You can’t ignore it! The wording states: “No member or person shall fail to provide information or testimony or to permit an inspection and copying of books, records, or accounts pursuant to this Rule.” If you get this request, it’s time to follow it, no questions asked. It’s not your decision and failing to follow this provision can mean horrible consequences. You can be suspended if you fail to comply.
There are many steps to take if you’ve received a subpoena , but your lawyer is the best person to guide you here. You don’t want to do homemade Internet steps to take care of a FIRNA investigation because no matter how well-meaning the website, the rules here are too intricate to explain in 1,000 words or less. This is something that even lawyers often grapple to understand when they first start working on the cases, and remember, this is technical financial industry language, regulatory language, so it’s not something you’re going to have a firm grasp of. The person who will have a firm grasp on all these rules and the procedures for responding to an informal or formal inquiry is your faithful lawyer.
We understand completely that you might be panic-stricken over an accusation of wrong-doing, but remember: It’s just an accusation! Nothing has been decided against you yet, you still have your career intact, and there’s a good chance that with a solid lawyer on your side, this will all blow over IF you follow the proper procedures. Your lawyer will need to know the facts behind what triggered the FIRNA subpoena, what you might have done to contribute to it, and then it’s time for you and your lawyer to construct your written response to the ongoing informal inquiry. Don’t use a do it yourself approach here, as it can literally cost you your career and sometimes even result in formal charges.
Once you and your lawyer have constructed and sent your formal written response, be patient. It can take FIRNA six months to respond back to you, and yes, every moment of that can be stressful. With a good lawyer on your team, though, you know that you’re in good hands and that whatever turn the investigation takes, your lawyer is prepared to deal with it and defend you to the fullest. No one wants to be notified of this type of investigation. It’s natural to be afraid, to worry, and to struggle at times. Lean on your law firm, though, to make the right legal decisions for you in your case. Hiring an experienced firm like SPODEK LAW GROUP can make all the difference. You’re in competent hands when you’re with us, some of the best hands you can be in for your situation.
Above all, don’t ignore your inquiry! Call us today and let us help you.
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