In this week’s Ask An AdvisorLaw Expert, we’re asking the OG of FINRA industry disputes, Dochtor Kennedy, MBA, J.D., what happens when investors make formal complaints against advisors and how do BDs typically react when advisors are hit with a violation?
- Do BrokerCheck disclosures ever fall off automatically?
- Weaponized Form U5
- Investment Adviser Representatives (IARs) Must Complete Continuing Education Program To Maintain Registration
- FINRA’s expungement reform takes a turn for the worse
- Do you have a dedicated chief compliance officer?
- If I’ve been terminated, how long will it be before a Form U5 is filed?
- Certified Financial Planners Face Tough Enforcement Under Tom Sporkin
Yeah, absolutely you can. Now, firms can terminate you for any number of reasons. Typically, when an investor complains, a customer complaint against you that rises to the level of a rule violation or a violation of a security statute, the firms motivated to eliminate their affiliation with you and your affiliation with them. The reason for that is that FINRA has put great effort toward eliminating as many rogue brokers as possible within the industry. Rogue brokers is a very general term typically meaning those that have a history of rule violations or allegations of rule violations. Oftentimes, a broker-dealer will terminate their relationship with an individual advisor [because] they believe in good faith that the advisor violated a FINRA rule.