Disciplinary Hearings & Subpoenas
Receiving a subpoena from any government agency or regulatory authority, like the SEC or FINRA can be a worrisome event in anyone’s life, be it a financial professional or an individual. SEC subpoenas are a common part of the securities regulatory landscape. While the SEC can and will subpoena anyone – registered or unregistered – who is potentially a witness or target of an SEC investigation, FINRA registered representatives are subject to FINRA Rule 8210 as well. Our team of regulatory attorneys can help industry professionals with disciplinary hearings and subpoenas.
FINRA Rule 8210 allows FINRA investigators to essentially “subpoena” a person – i.e., require that they testify on the record and/or compel them to produce documents – without actually ever getting a subpoena. Instead, FINRA uses what is commonly (and not surprisingly) referred to as an “8210 Request.” Failing to respond to a FINRA 8210 request means that you lose your license – and for full-time registered reps, your livelihood.
Read our blog "I Just Got An SEC Subpoena: Now What Happens?"
When the SEC calls individuals in to provide testimony, it will be in what is commonly referred to as an “on the record” interview (or “OTR” for short). Subpoenas for testimony will also be rather straightforward in that the recipient will know when and where they will need to appear to testify, but will typically not contain any clues as to what the testimony will be about. However, in advance of the OTR, you may be required to provide documents related to certain transactions, individuals, businesses, etc. that you will likely be questioned on in your OTR. You also may be questioned on documents or testimony provided by others.
Consulting with an experienced disciplinary hearings and subpoena attorney could be the best move that you make when faced with such a potentially life-changing event. The regulatory attorneys at Malecki Law have experience representing individuals in regulatory actions before FINRA as well as the SEC. Having an experienced counsel can greatly determine the outcome in your favor.
It is important to be properly prepared for responses to subpoenas, both for testimony and for documents. Now that you are involved in an investigation and potential litigation, ordinary words could have new meaning. Something that may seem harmless in an ordinary discussion could have a different meaning in a legal context – potentially exposing you to liability.
Once you have responded to subpoena and/or appeared at your OTR, the SEC may choose to formally charge you or it may determine that it will not pursue any action against you. While, the latter is certainly the preferred option, the former is certainly the most concerning. The SEC may pursue you civilly or criminally (typically through the U.S. Attorney’s Office).
The magnitude of the potential penalties you may be facing can include substantial fines, as well as losing your license and your livelihood. So, from the moment you receive a subpoena, your focus needs to be on protecting yourself, your savings, your reputation, and your license(s).
No Action taken in FINRA investigation into alleged fundraising outside business activity and working on a transaction after their license being terminated in violation of FINRA Rules
No Action by SEC for 2 individuals after full investigation and OTR regarding alleged spoofing and layering transactions by trader and assistant
Obtained No Action Letter from FINRA Regulation Enforcement Department for Series 24 Supervisor under investigation for allegedly accepting client funds from an insurance annuity policy
Obtained No Action letter from FINRA for investment professional alleged to have altered Bloomberg screens sent to clients
Obtained No Action letter for financial professionals in matters involving allegations of embezzlement of client funds with sales assistant
Obtained No Action in case involving alleged private securities transaction and outside business activity for a securities broker involving Countrywide and life bonded settlements
Obtained No Action letter for investment professional for allegations relating to outside business activities
Successfully obtained No Action after Wells submission to FINRA regarding allegedly mismarking order tickets
Successfully represented NYSE floor broker in fully contested enforcement hearing on front running
Successfully negotiated favorable AWC settlement with the SEC regarding alleged violations related to intentional altering of an analytical model through sets of assumptions reflected in the Offering Memorandum of the Regional Aircraft Securitization Program Offerings (“RASPRO”) transaction
Settlement of Favorable AWC with FINRA relating to cherry picking and front running by a fund manager
Negotiated favorable AWC settlement with SEC for group of traders for allegedly operating an unregistered broker dealer
Obtained No Prosecution agreement from SEC for professional trader of US Inflation Trading desk related to alleged misreporting of losses on complex derivatives desk
Obtained No Prosecution for two brothers in an SEC insider trading case
Represented subpoenaed party in a SEC investing into EB-5 funding
Represented subpoenaed individuals in SEC investigations involving Variable Annuity Sales Practices at a major brokerage firm
Numerous ongoing representations of financial practitioners in negotiation disputes relating to Form U4 and U5
Numerous ongoing representations of financial professionals in OTRs before SEC and FINRA for alleged rule violations
Successfully represented Series 7 licensed broker in FINRA investigation relating to failure to report tax liens
Successfully represented Series 7 investment professionals in issues of FINRA investigation relating to issues of failure to report regulatory settlement with CFP Board and several states