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An Acceptance, Waiver, and Consent (AWC) is FINRA’s version of a settlement or plea agreement following an investigation into an alleged rule violation. States often refer to the agreements as “consent orders.” While they offer a way to avoid formal hearings, AWCs can have a disproportionately severe impact on an individual financial advisor's career, as the details become public on BrokerCheck.
This guide explores the complexities of AWCs, the importance of professional defense, and why it's crucial to seek counsel to protect your reputation and livelihood.
The Disproportionate Consequences of an AWC
When a large financial firm and an individual advisor both receive a fine for a rule violation, the impact is not equal. A $50,000 fine is a minor expense for a large firm, but a career-altering blow for a single advisor.
Furthermore, investors are far more likely to check an advisor’s BrokerCheck profile than a firm’s. This means that by signing an AWC, the harm to an advisor is far more severe than the harm to the firm.
Why You Need Professional Counsel
When faced with an AWC, some steps are vital to mitigating any damage to your record. It is paramount that you have counsel when facing an investigation, as FINRA investigators are well aware that they can steamroll firms or advisors who are not knowledgeable about FINRA’s processes. An experienced attorney will:
- Analyze the Allegations: Determine whether the alleged conduct truly constitutes a rule violation.
- Evaluate Proposed Sanctions: Assess whether the proposed penalties align with FINRA’s Sanction Guidelines and prior precedent.
- Negotiate on Your Behalf: Work with FINRA to influence the sanction and the public language published on your record.
Should negotiations fail, your attorney can advise you on whether to force FINRA to prove its allegations at a formal hearing. While litigation has its own risks, it can be the right choice when the proposed consequences are too severe or the language is overly harsh.
AdvisorLaw: Your Defense Against Industry Threats
At AdvisorLaw, we provide expert representation for financial professionals facing threats from:
- FINRA and the SEC
- State regulators and the CFP Board
- Firm compliance and retail investors
We exclusively represent financial advisors and wealth managers, never the broker-dealer. Our deep experience in FINRA’s enforcement processes positions us to defend your career when it matters most.
There is no point in your career as a financial professional that our services can benefit you more than when you are subject to an investigation.
Contact us today to learn more about our defense services and to get a complimentary consultation.