Once the Complaint is issued, the respondent has 25 days to file an Answer, which must admit, deny, or disclaim knowledge responsive to, each allegation in the Complaint (FINRA Rule 9215). FINRA’s complaint is supposed to specify “in reasonable detail” the conduct which caused the rule violation. Complaint – The Disciplinary Proceeding Officially BeginsĪ disciplinary proceeding officially begins when FINRA serves the Complaint. This topic was covered in an earlier post. The lifecycle of a FINRA disciplinary proceeding follows a predictable path: It is imperative that you consult an experienced FINRA-defense attorney to assess your exposure, if any and decide on the best strategy for your unique circumstance. Obviously, many enforcement matters involve complex issues of fact and law and require the assistance of a lawyer so be aware that this is basic information and no substitute for legal advice. This post sheds light on the nuts and bolts of FINRA’s disciplinary hearing process. FINRA’s Office of Hearing Officers resolves approximately 400 proceedings per year.Īlthough FINRA’s enforcement program is expansive, insufficient guidance is given to industry participants who choose to contest FINRA’s charges. By 2015, that number jumped to $96 million.Įach year, FINRA initiates approximately 1,500 disciplinary actions against member firms and employees. In 2008, FINRA ordered restitution payments to investors totaling $6 million. By 2016, that number jumped to $176 million. In 2008, FINRA levied fines totaling $28 million. FINRA’s enforcement program is big business.
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