Governmental, Regulatory and Self-Regulatory Proceedings

Under the Securities Exchange Act of 1934 (the Exchange Act), the broker-dealer industry is regulated by a self-regulatory organization (SRO). The Financial Industry Regulatory Authority (FINRA) has emerged as the sole self-regulatory body for broker-dealers in the United States, entrusted with the responsibility of protecting investors and strengthening investor confidence in the securities industry. When a brokerage firm or a broker abuses investors trust, breaches industry rules, or cause financial losses, the self-regulatory body FINRA steps in to initiate disciplinary proceedings. In certain circumstances, FINRA will refer fraud and insider trading cases to the SEC and other agencies for litigation and prosecution. In the year 2014, FINRA brought 1,397 disciplinary actions against registered brokers and firms, levied $134 million in fines, and ordered $32.3 million in restitution to harmed investors.1 They also referred more than 700 fraud and insider trading cases to the SEC and other regulatory bodies for litigation and/or prosecution. Usually it is the cases that pass on to the SEC that garner media headlines but the financial industry’s regulatory and self-regulatory proceedings are crucial and commonplace in keeping the industry safe for investors.

When audits and investigations uncover issues of significance (or perceived departure from industry rules), governmental regulation and proceedings commence. The experienced attorneys at Malecki Law have developed a distinguished history as counsel in securities enforcement actions brought forth by the SEC, FINRA (formerly NASD and NYSE), federal and state criminal authorities, state securities regulators, and other self-regulatory organizations and exchanges. One of the most critical decisions, whether to litigate or settle, cannot be lightly decided and requires skilled, experienced advice.

Malecki Law has an excellent rapport with civil and criminal, regulatory and self-regulatory bodies developed over 20 years. While Malecki Law thrives in the litigated setting such as trials or hearings, zealous representation often involves on-the-record interviews, sit-downs with regulators, and a favorably negotiated settlement or cooperation agreement.

Litigating breaches of regulatory rules and laws can be costly, time consuming, and a risk to one’s employment. Like arbitration, regulatory hearings are conducted much like internal trials, before industry professionals and administrative law judges. Such violations not only involve brokers misconduct, but could also result in investigations by criminal authority.

Ms. Malecki represents individuals from the initial stages of investigations through trial and on appeal in a wide range of complex civil and criminal matters, including before the Securities and Exchange Commission ("SEC") in enforcement actions, regulatory proceedings, securities and financial litigation, commercial litigation, and international disputes. She has counseled clients in civil and criminal investigations, congressional inquiries and testimony at hearings, and in internal audits and investigations.

Ms. Malecki defends in enforcement actions and investigations initiated by various federal and state agencies and departments including the SEC, Department of Justice, United States Attorneys, state attorney generals and the Financial Industry Regulatory Authority ("FINRA"). These matters involve allegations related to securities, banking, and accounting fraud; insider trading; antitrust violations; whistleblowers; adequacy of disclosures; broker-dealer and investment adviser compliance; fiduciary duties; mortgages and lending; complex financial products; securitization; deceptive trade practices; and other similar areas.

Useful Links for Regulation and Self-Regulation

United States Securities & Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
www.sec.gov
202-942-8088 Main Number
202-942-7040 Public Complaints
202-942-4530 Enforcement
202-942-2900 General Counsel
http://www.sec.gov/news/openmeetings

Financial Industry Regulatory Authority
1735 K Street
Washington, D.C. 20006
www.finra.org
1-800-347-1997

Commodities Futures Trading Commission
1155 21st Street, N.W.
Washington, D.C. 20581
www.cftc.gov
202-418-5000 Main Number
202-418-5250 Office of Proceedings & Reparations
202-418-5320 Division of Enforcement
202-418-5120 General Counsel

New York State Attorney General's Office
Bureau of Investor Protection
120 Broadway, 23rd Floor
New York, New York 10271
www.oag.state.ny.us
212-416-8200
1-800-771-7755 Consumer Fraud

1 www.finra.org/about

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