FINRA Defense

Experienced FINRA Defense Attorneys Fighting for Your Rights

  • In a little over ten years, FINRA has become one of the largest organizations in the United States regulating brokerage firms and associated persons by ensuring the integrity of the security markets in the United States.
  • FINRA has regulatory authority by which it can issue rules governing brokerage firms and associated persons as well as enforcement authority by which it can open investigations and bring disciplinary proceedings.
  • The organization regularly uses machine learning technologies to oversee the brokerage profession and assist it in initiating investigations.
  • An investigation that ends in settlement or proceeds to a hearing could impose a variety of penalties including sanctions, censures, fines, restitution orders to the injured victims, or suspension of the brokerage firm and associated persons’ licenses.
  • Consider hiring a defense attorney to work on your personalized defense against FINRA proceedings.

Experienced FINRA Defense Team

If you have been charged or are being investigated by FINRA, now is the time to take prompt action in your defense.

FINRA regularly utilizes AI and other machine learning technologies to oversee and scrutinize brokers and provide support services to investors and stakeholders.

The results of FINRA’s disciplinary actions become publicly available, which may impose a permanent loss to your reputation.

Do not fall prey to a protracted FINRA investigation. You need an individualized defense strategy right away. Do everything possible to defend your rights and career.

It is critical that you are represented by an experienced defense attorney with extensive knowledge of the FINRA investigation process.

Our attorneys include former FBI agents, former U.S. attorneys, and former prosecutors, all poised to offer you the best chance of success.

Do not wait to get in touch with a qualified defense attorney today. Put Oberheiden, P.C. on your side to fight for your freedom and reputation.

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden

Founder

Attorney-at-Law

John W. Sellers
John W. Sellers

Former Senior Trial Attorney
U.S. Department of Justice

Local Counsel

Joanne Fine DeLena
Joanne Fine DeLena

Former Assistant U.S. Attorney

Local Counsel

Lynette S. Byrd
Lynette S. Byrd

Former Assistant U.S. Attorney

Partner

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Aaron L. Wiley
Aaron L. Wiley

Former Federal Prosecutor

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (OIG)

Gamal Abdel-Hafiz
Gamal Abdel-Hafiz

Former Supervisory Special Agent (FBI)

Chris Quick
Chris Quick

Former Special Agent (FBI & IRS-CI)

Kevin M. Sheridan
Kevin M. Sheridan

Former Special Agent (FBI)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

Dennis A. Wichern
Dennis A. Wichern

Former Special Agent-in-Charge (DEA)

What is FINRA?

The Financial Industry Regulatory Authority (“FINRA”) is an independent, private, not-for-profit organization authorized by the government that regulates broker-dealers and brokerage firms in the United States. FINRA was approved by the SEC on July 30, 2007. It oversees over 600,000 brokers in the nation and analyzes daily market events by the billions.

The organization is the result of the consolidation of the National Association of Securities Dealers (NASD) and the member regulation, enforcement and arbitration operations of the New York Stock Exchange (NYSE). As the successor, FINRA eliminates the redundant regulation and reduces the cost and complexity of compliance that was associated with the prior regulatory bodies.

FINRA ensures the following:

  • every investor receives basic protections
  • anyone who sells a security has been tested, is qualified, and is licensed
  • every security advertisement is truthful and not misleading
  • any security sold to an investor is suitable for that investor’s needs
  • investors receive complete disclosure regarding the investment product before their purchase

Lastly, FINRA maintains “BrokerCheck,” which is a searchable database of brokers, investment advisers, and other financial advisers. It lists every individual’s education and enforcement actions as well as the records of the individuals and brokerage firms that are working in the securities industry within the United States.

What Does FINRA Do?

FINRA protects investors against fraud and misleading practices. It plays a crucial role in ensuring the faithful operation and integrity of the U.S. security markets.

FINRA works under the SEC and performs the following duties:

  • educates investors
  • writes and enforces rules that govern registered broker-dealer firms and registered brokers
  • examines brokerage firms for compliance with the rules
  • creates and maintains market transparency

Along with its above regulatory duties, FINRA also has the power under its enforcement capacity to take disciplinary actions against registered individuals and brokerage firms that violate the industry’s rules.

In 2018, FINRA brought over 900 disciplinary actions against registered brokers and brokerage firms for violating ethical rules and referred over 900 fraud and insider cases to the SEC for further investigation and prosecution.

It is important that you understand the investigation process of FINRA, including how it begins, the procedures the organization uses, and the ways by which an investigation could end, which is explained in the next section.

How FINRA Investigations Work

The 8210 Letter

As mentioned, FINRA investigates potential securities violations and has the power to bring formal disciplinary charges against brokerage firms and their associated persons.

The FINRA investigation can begin based on initial findings made in broker/brokerage firm filings with the organization, customer complaints, referrals from other federal agencies and departments, press reports, tips, or other FINRA examination findings.

The broker or brokerage firm will typically first learn that a FINRA enforcement proceeding has begun when FINRA issues them an OTR notice (called an 8210 letter) or an OTR request.

An OTR is an “on-the-record” interview of an individual. It generally proceeds like a deposition. A Rule 8210 letter is used by FINRA to obtain information for examining or investigating a brokerage firm or associated persons.

While FINRA may simply want that individual’s testimony as a witness and will not charge that individual with a FINRA violation, it could also mean that the individual is a subject of the 8210 letter. Therefore, it is critical to always be prepared.

Filing A Disciplinary Action and the Wells Notice

As the case more fully develops, FINRA may determine that it is necessary to file a disciplinary action against the brokerage firm or associated persons, or both. FINRA’s Department of Enforcement will then contact the firm or associated person and advise them that FINRA will likely initiate a formal disciplinary action against them. Such calls are called “Wells” calls and are typically followed by a Wells notice, or a settlement document. The matter is concluded if the parties settle.

If the parties do not settle, FINRA issues a Wells notice that describes the charges that it intends to bring. The brokerage firm or associated person (the respondent) has the option of responding to the Wells notice. The respondent is then required to update Form U4, which is a FINRA form used to make various disclosures. On this form, the respondent must state that they are the subject of a FINRA investigation.

The Complaint and Hearing

At this stage, FINRA will decide whether to file a complaint. If it proceeds with the complaint, FINRA will list the allegations against the respondent. This filed complaint becomes publicly accessible on FINRA’s website.

The proceeding will then be heard before a three-person panel. The hearing may include expert witnesses and could therefore become quite costly very quickly. However, the decision can take over a year to be announced. Many brokerage firms and associated persons therefore prefer a settlement to save time and money.

Settlement, Dismissal, or Other Minor Cautionary Actions

FINRA will often offer the respondent the chance to settle the matter through a Letter of Acceptance, Waiver and Consent (“AWC”). If the matter settles, FINRA may impose a sanction, censure, fine, restitution orders, or suspension upon the respondent. The respondent will typically agree or negotiate with FINRA as to the contents of the AWC. If the respondent thinks the result is unfair, they would then request a hearing.

If the case does not settle, FINRA could dismiss the case if it determines further action would be unwarranted. It could similarly issue a cautionary action if the violation is minor and there is no market damage.

FINRA frequently refers investigations to the SEC, DOJ, state security authorities, and other law enforcement entities.

If you received an 8210 letter or other request from FINRA telling you that you are under investigation, it is never too early to contact a defense lawyer and explore your legal actions. We will review every case, whether you just received notice that you are under investigation or whether your case is in FINRA’s final stages. It is neither too early nor too late to hire a defense attorney to work on your case.

How to Respond to a FINRA Investigation

Being investigated by FINRA could waste needless time, expense, and result in many challenges for your company, including damage to your reputation and loss of liberty.

The FINRA investigation process and hearing decision can take months, if not span over a year. Get an attorney on your side to defend you immediately.

The FINRA defense attorneys at Oberheiden, P.C. have the experience and knowledge needed to prepare your defense to fight against these charges both during the investigation stage and throughout the hearing.

The stakes in a FINRA investigation can be high. If you are being investigated by FINRA in connection to a securities violation, call 888-680-1745 or contact our office today for a free consultation.

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