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Disciplinary Hearings & Subpoenas
It can be unsettling to receive a subpoena or request for information from any government or regulatory authority, such as FINRA or the SEC. Whether you are a financial professional or an individual, subpoenas are a common tool of securities regulators and parties in cases at or with FINRA and the SEC.
Whether you are an industry participant or just a person in the United States, the SEC can and will subpoena you if you are potentially a witness in or a target of an SEC investigation or complaint. In addition to the SEC, FINRA registered representatives are also subject to requests for information through FINRA Rule 8210. Our team of regulatory attorneys can help anyone who receives an SEC subpoena, as well as industry professionals with disciplinary matters, subpoenas, and hearings.
FINRA Rule 8210 essentially allows FINRA investigators to “subpoena” a person – i.e., require that he or she testify on the record and/or compel him or her to produce documents – without ever actually having been given 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. 8210 requests can require you to produce documents, as well as give testimony “on the record,” i.e., recorded under oath.
SEC subpoenas also require witnesses to give documents and possibly testimony. If you are served with a subpoena, it will contain the details regarding where and when you need to testify, but the subpoena will not have any information regarding what you are being called to testify about. Prior to giving testimony, you could be asked to submit documents regarding certain businesses, individuals, transactions, etc., and these documents, along with those submitted by others, will potentially come up during the testimony. Malecki Law will communicate with the SEC on your behalf to obtain the Order of Investigation, as well as any information a staff attorney is willing to divulge, so you are not going in completely unaware.
Most importantly, Malecki Law has significant experience preparing witnesses to testify. Testimony is not a simple conversation, there are certain “rules” you need to know. Thorough preparation is the most important thing to do before you testify and if done correctly, could possibly avoid future action by the regulator. Being fully prepared when responding to both subpoenas for documents and/or for testimony is of the utmost importance. What you say, while typically just ordinary words, takes on a whole new meaning now that you are part of an investigation and your words could potentially be used against you in civil or criminal proceedings. You need to be careful of saying something that might expose you to legal liability, despite your words seemingly harmless nature. Words in a legal proceeding often take on enhanced meaning than in everyday life as you may use them.
After you have answered your subpoena and appeared to testify, the SEC has different courses of action: (1) the SEC may decide not to take any further testimony or action against you; (2) the SEC will allow you to respond to (provide a “Wells Notice”) or settle what they feel is wrongful conduct; or (3) the SEC could bring formal charges. The possibility of civil or criminal legal action (usually via the U.S. Attorney) should be a primary concern of yours. The severity of penalties you could potentially be facing includes possibly losing your license, spending a great deal of money on legal defenses and could cost you your job and your livelihood, as well as being encumbered with hefty fines. While you may hope no further actions are taken, you need to be prepared for the worst to obtain the best result.
Making an appointment to consult with an experienced disciplinary hearings and subpoena attorney is an integral part of preparing to answer a subpoena. Malecki Law and its attorneys have extensive experience representing witnesses who are called to appear before the SEC and FINRA. Having an experienced counsel can greatly determine the outcome in your favor.
Read our blog "I Just Got An SEC Subpoena: Now What Happens?"