FINRA & Regulatory Investigations
Investigations from financial industry regulators demand responses that are precise.
Every word is evidence.
All financial industry regulatory investigations start with a simple inquiry and can end in disclosures, suspensions, fines, and possible barring from the financial services industry.
Due to the stakes involved at this level, it is vitally important to respond promptly, consistently, and with a high degree of precision. An advisor should always have counsel representing them at every point in this process.
There is no point in your financial advice career that AdvisorLaw will work harder at protecting your livelihood than when you are subject to a FINRA, state, or licensing board investigation (such as the CFP Board).
Formal FINRA Rule 8210 Letter Inquiry
Formal FINRA Regulatory Investigation
Formal regulatory investigations from FINRA are the second stage, in which regulators decide that the response to the FINRA inquiry letter merits uncovering more detail. Investigations may be opened from various agencies:
- Financial Industry Regulatory Authority (FINRA)
- State attorneys general and securities regulators
- CFP Board
On The Record Interviews (OTR)
Acceptance, Waiver and Consent (AWC)
Statutory Disqualification (SD)
Heightened Supervision MC-400
If an advisor does not agree to sign an AWC, yet the regulator continues to believe that rules were broken, the regulator may issue to the advisor a Wells Notice. The Wells Notice advises the individual that the regulator intends to bring a formal claim enumerating the specific rules believed to have been violated. This Wells Notice is the formal starting point for regulatory litigation. Ultimately, the regulator will need to prove their case against the advisor.
It is absolutely imperative to realize that, no matter which way these events unfold, each step of the process is set up for the regulator to build a case against you. Admissions at any point on this timeline can possibly upend a future settlement or negotiation and cost a financial advisor their entire career.
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