FINRA / SEC Investigations

FINRA/SEC Investigations And Enforcement Proceedings

Mr. Betts represents brokers in connections with FINRA enforcement proceedings, including investigations, examinations and disciplinary actions. This includes representing brokers in responding to FINRA requests for documents and on-the-record interviews (“OTRs”) during which brokers are required to appear and testify under oath. Some of the common subjects of FINRA enforcement proceedings include:

  • Forms U4/U5 – Late filing, failure to file and filing of false, misleading or inaccurate forms or amendments
  • Suitability / unsuitable recommendations
  • Churning or excessive trading
  • Unauthorized transactions
  • Failure to supervise
  • Communications with the public
  • Discretion
  • Misrepresentations or material omissions
  • Pricing
  • Outside business activities
  • Selling away / private securities transactions
  • Unregistered securities
  • Customer confirmations
  • Customer protection rule
  • Record-keeping violations
  • Regulation T and margin requirements
  • Conversion or improper use of funds or securities
  • Forgery or falsification of records
  • Registration violations

Mr. Betts is also experienced in representing brokers in FINRA-related expungement proceedings. These cases generally arise from negative information appearing on a broker’s Form U4 or U5 and available to the public through FINRA’s Central Registration Depository (CRD) system and through the “BrokerCheck” system. Such negative information often (but not always) arises from complaints made by a customer and/or arbitration proceedings initiated by a customer. In many cases, following the completion of arbitration proceedings or otherwise, the negative information can be “expunged” from the broker’s record. There are a number of steps that must be taken in order to satisfy FINRA’s requirements for expungement, and FINRA has issued guidance summarizing how the expungement process works.

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