WE SOLVE BROKER/INVESTMENT ADVISOR REGISTRATION PROBLEMS NATIONWIDE FROM OUR FLORIDA OFFICES
Getting licensed to sell securities, commodities and/or give investment advice can be difficult particularly for those brokers and investment advisors who have had problems in the past with law enforcement agencies, customer complaints and/or financial regulatory agencies, such as the U.S. Securities and Exchange Commission (SEC), Commodities Futures Exchange Commission (CFTC), Financial Industry Regulatory Authority (FINRA), Florida Office of Financial Regulation (Fla-OFR), or the National Futures Association (NFA). An experienced lawyer can help you persuade the federal and state government agencies and self-regulatory organizations (SROs) to let you practice your profession. The attorneys at the Law Offices Of Robert Wayne Pearce, P. A. can help you advocate your position and fight for you in self-regulatory agency and state administrative proceedings to gain and/or retain your license. Most cases are resolved by negotiation and compromise and can include enhanced supervision agreements that allow you to prove over time to the SROs and state agencies that you are worthy of an unrestricted registration.
YOU NEED AN EXPERIENCED FINRA DEFENSE LAWYER WHEN FACING STATUTORY DISQUALIFICATION
Attorney Pearce will help you obtain relief from “statutory disqualifications” through Eligibility Proceedings. Generally speaking, a person who is subject to a “statutory disqualification” may not be associated with a FINRA member in any capacity unless and until approved in an eligibility proceeding. These proceedings are extremely complex and becoming more common because FINRA has expanded the list of disqualifying events as follows:
- Certain misdemeanor and all felony criminal convictions for a period of 10 years from the date of conviction.
- Temporary and permanent injunctions (regardless of their age) issued by a court of competent jurisdiction involving a broad range of unlawful investment activities.
- Expulsions (and current suspensions) from membership or participation in a self-regulatory organization.
- Bars (and current suspensions) ordered by the SEC or SROs.
- Denials or revocations of registration by the SEC or CFTC.
- Any final order of a state securities commission or any agency or officer performing like functions, state authority that supervises or examines banks, savings associations or credit unions, state insurance commission or any agency or office performing like functions, an appropriate Federal banking agency, or the national credit Union administration that: bars such person from association with an entity regulated by such commission, authority, agency, or officer from engaging in the business of securities, insurance, banking, savings association activities, or credit union activities; or constitutes a final order based on violations of any laws or regulations that prohibit fraudulent, manipulative, and deceptive conduct.
- Findings by the SEC, CFTC, or an SRO that a person “willfully” violated the federal securities commodities laws, or the Municipal Securities Rulemaking Board (MSRB) rules; “willfully” aided, abetted, counseled, commanded, induced, or procured such violations; or failed to supervise another who commits violations of such laws or rules.
If you have become the subject of a statutorily disqualifying event, it is important that you immediately contact a qualified and experienced attorney in order to be permitted to continue to work while engaged in an Eligibility Proceeding.
WE REPRESENT BROKERS IN FINRA ELIGIBILITY PROCEEDINGS NATIONWIDE
The more complex registration problems involve “statutory disqualifications” for a variety of events. Once one becomes aware of a statutory disqualifying event, the FINRA member firm is obligated to report the event to FINRA and cease its association with the disqualified person unless and until that person is approved for continued registration in an Eligibility Proceeding. If the event occurs while the associated person is currently registered and working with the member firm, the person may be permitted to continue to work under certain circumstances, provided the member firm promptly files a written application for the associated person to continue his or her employment during the course of the Eligibility Proceeding. The same rule applies to member firms that become the subject of a statutory disqualification event.
This is a very technical proceeding and requires a skilled trial lawyer with detailed knowledge of FINRA practices and procedures. Attorney Pearce at the Law Offices of Robert Wayne Pearce, P.A. has substantial knowledge and experience in this area of law and regulation.
The first step is for the member firm or its lawyers to amend the associate’s Form U-4 and complete and file a detailed application to initiate the Eligibility Proceeding. If the member is the subject of this disqualifying event, than it must amend its Form BD and file the application on its own behalf as well. The FINRA Registration and Disclosure division then examines the application for deficiencies. It compiles all the documents necessary for Member Regulation and the Office of General Counsel to review and consider.
The Member Regulation division acts as the party for FINRA in all Eligibility Proceedings. It is responsible for evaluating all of the applications and making recommendations to the National Adjudicatory Counsel. The important factors in considering whether to grant or deny the application for continued eligibility as a member or associate member of any firm are as follows:
- The nature and gravity of the disqualifying event.
- The length of time that has elapsed since the disqualifying event.
- Whether any intervening misconduct has occurred.
- Any other mitigating or aggravating circumstances that may exist.
- The precise nature of the securities-related activities proposed in the application.
- The disciplinary history and industry experience of both the member firm and the firm proposed by the member firm to serve as a responsible supervisor of the disqualified person.
These applications are generally not approved without the member firm undertaking to perform heightened supervision of the person who is subject to disqualification. Virtually every application that is approved requires the implementation of the special supervisory plan.
The next step is the actual Eligibility Proceedings hearing, which are scheduled throughout the year and held in Washington DC. It is a formal hearing where everyone is afforded the opportunity to be heard, present evidence, and be represented by attorneys to argue in favor of their position. The Member Regulation division is represented by a FINRA staff attorney who advocates the recommendation that the application be granted or denied. Although the decision at FINRA is ultimately made by the National Adjudicatory Council, the Statutory Disqualification Committee actually makes the recommendation based upon the record in the Eligibility Proceeding and steers the decision of the Council. In rare instances, its decision is the final step at FINRA unless the FINRA Board of Governors intervenes and seeks to review the decision to assure itself that the admission of the disqualified person or member is not inconsistent with the public interest and the overriding regulatory goal to ensure the protection of investors.
The very final step in this regulatory process is review of the FINRA decision by the SEC, which must review and approve every FINRA decision before it takes effect. It usually is a rubber stamp approval, but on occasion the SEC may scrutinize a particular application by requesting more information, requiring more restrictions, or requiring more undertakings on behalf of the member firm and its supervision of the disqualified person. Similarly, if FINRA denied the application, the aggrieved person is entitled to an appeal to the SEC for the relief of the “statutory disqualification” requested.
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