FINRA, SEC and CFP Board® Disciplinary Actions and Investigations

For a financial advisor, registered representative, investment advisor, or securities broker, a disciplinary investigation is a very serious matter.  Violations of FINRA or SEC rules can lead to sanctions including monetary fines, suspension of an advisor’s license or even a bar from the industry.  Sanctions can also negatively affect a registered representative’s or registered investment advisor’s employment or future employment.

Types of Disciplinary Actions

FINRA, the SEC, and other enforcement agencies investigate and may bring disciplinary actions against securities industry professionals for alleged misconduct, including:

  • Engaging in unapproved outside business activities
  • Selling away
  • Settling customer complaints away from the firm
  • Sale of unregistered securities
  • A late or incomplete filing of a Form U-4 amendment
  • Churning (excessive trading)
  • Use of misleading communications
  • Improper use of customer funds
  • Exercising discretion over a customer account without authority
  • Forgery or falsification of records
  • Failure to respond truthfully to a FINRA inquiry
  • Guaranteeing a customer against a loss
  • Misrepresentations or material omissions
  • Unsuitable recommendations
  • Engaging in unauthorized transactions for a customer
  • Cheating on industry examinations

 

The Disciplinary Action and Investigation Process

If you are accused of a rule violation, our experienced disciplinary action attorneys can help you through each stage of the process, including:

Responding to the initial request for documents and information

We can help you respond to a FINRA, SEC or other agency request for documents and information.  If the agency determines from its review of the submitted documents and information that no rule violation occurred, the investigation will end there.

Representing you at an “on-the-record” interview

You may be required to give a recorded interview, under oath, to answer the investigator’s questions.  We can help you prepare for the interview, and represent you during the interview.

Responding to a “Wells notice” from FINRA or the SEC

If you receive a “Wells notice” letter from FINRA or the SEC informing you that an enforcement action against you is planned, you have an opportunity to respond to the letter and present reasons why an enforcement action would be inappropriate.  We can advise you whether a “Wells submission” is prudent and, if so, help you prepare it.

Responding to a FINRA or SEC complaint alleging rule violations

If an SEC or FINRA complaint is filed against you, we can work with you to prepare your answer.  If you do not file an answer, sanctions may be entered against you by default.

Presenting your defenses and mitigating factors at a hearing

You are entitled to a hearing.  We can present evidence and arguments supporting your defenses, or seeking to minimize any sanction against you.

We will give you our candid evaluation of your potential exposure and options.  We will guide you through the process and be prepared to vigorously defend you from an unfounded or overreaching prosecution.  We will advise you when it is in your interest to settle and will negotiate for you, seeking a resolution that will have the least possible impact on your career.

We can also represent you if you are being investigated by the Certified Financial Planner Board of Standards or The American College of Financial Services.  Violations can affect an advisor’s Certified Financial Planner® or Chartered Financial Consultant® accreditations and certifications.

If you are being investigated, you should not try to navigate the disciplinary process alone  — your career may be at stake.  The experienced disciplinary action lawyers at Moulton, Wilson & Arney, LLP can give you the guidance you need.

We represent financial advisors, registered representatives, investment advisors and securities brokers nationwide in disciplinary investigations, employment claims and disputes, and transition issues.

Contact Moulton, Wilson & Arney, LLP for a free initial consultation.