Frequently Asked Questions about FINRA Rule 8210
Under FINRA Rule 8210, the Financial Industry Regulatory Authority (FINRA) has the authority to “inspect and copy the books, records and accounts” of a FINRA member as it relates to any matter concerning an investigation, complaint, examination or proceeding. As part of the rule, FINRA may request individuals to provide information and/or testify under oath as it relates to an investigation or proceeding.
Financial professionals who receive an 8210 letter need to understand why it was issued and the potential seriousness of the matter. It is thus imperative to seek legal counsel in a timely manner. Lewitas Hyman offers comprehensive securities law counsel to financial professionals nationwide. Our lawyers have significant regulatory experience and understand the complexities and consequences that a FINRA investigation poses.
The following is a list of common questions we receive from our clients relating to FINRA 8210 letters. If you have further questions about an 8210 letter you received or another securities law concern, we invite you to contact our Chicago office at (312) 291-4600 to schedule a free consultation.
What should I do if I receive an 8210 letter?
Before having any substantive discussions about the matter with FINRA, you should consult an attorney experienced in navigating FINRA investigations. The potential consequences of the investigation generally, and what you may communicate to FINRA specifically, may be severe, and there is often a short time frame to respond. It is thus best to retain counsel early enough in the process so that you have time to discuss how best to respond to the 8210 letter.
Why did FINRA send me an 8210 letter?
The most common reasons why you will receive an 8210 letter are:
- A customer complaint disclosed on your Form U4 or U5
- An arbitration relating to allegations of misconduct disclosed on your Form U4 or U5
- A resignation that occurred while you were under investigation disclosed on your Form U4 or U5
- A non-voluntary termination disclosed on your Form U4 or U5
- A criminal matter disclosed on your Form U4 or U5
- An anonymous tip, referral of complaint to FINRA
- A referral from an arbitration panel
What if I don’t respond to the 8210 request?
Ignoring the 8210 request is simply not an option for financial professionals who wish to remain employed in the securities industry. Failing to comply with an 8210 request will lead to FINRA barring you from affiliating with a FINRA member firm, which will have the collateral effect of impacting your ability to become registered with many state securities and insurance regulators, and will also impact your status with organizations such as the Certified Financial Planner (CFP) Board. This bar will also be a public record.
How should I respond to an 8210 letter?
Responses should be clear and organized, and should give FINRA the necessary information to answer the questions asked. If you fail to answer FINRA’s questions adequately, you will receive a follow-up inquiry, or FIRNA may decide to jump to requesting sworn oral testimony on the record, much like a deposition.
Most importantly, the response should be truthful and not seek to mislead FINRA, as the consequences of lying or misleading FINRA are severe. For this reason, it is best to formulate your response with the help of legal counsel.
What if I cannot provide the requested information within the provided time limit?
FINRA may request documents that are not in your possession if you are no longer at your old firm and no longer have access to the requested information. In these cases, FINRA will typically grant one extension, although you may receive multiple extensions if it is for a justifiable reason.
What are the possible consequences of an 8210 letter?
If FINRA finds that you violated FINRA rules or securities laws, it may impose either informal or formal disciplinary actions on the individual.
- Informal disciplinary actions: These actions are typically cautionary in nature and apply to less severe infractions (referred to as a cautionary action letter). It amounts to a warning for the individual and is not reported on your Central Registration Depository (CRD) report or on BrokerCheck.
- Formal disciplinary actions: Formal disciplinary actions that FINRA may impose include censure, fines, suspension and/or a permanent bar from the securities industry. The formal disciplinary process is resolved through either settlement or litigated proceedings.
- Settlement: Most FINRA investigations are resolved via settlement. Through the settlement agreement, respondents can resolve the investigation by submitting a Letter of Acceptance, Waiver and Consent (AWC).
- Litigated proceedings: These cases go to FINRA’s Office of Hearing Officers (OHO), where a contested hearing is held. The OHO hears the cases and issues a final decision, although you may still appeal the decision.
How long does it take to resolve an 8210 investigation?
It varies, based on the underlying facts of the investigation. In some cases, you may not hear anything from FINRA for several months until you get a letter that the investigation is closed. In other cases, you may hear back in several weeks that FINRA is requesting additional information.
Don’t Underestimate the Severity of an 8210 Letter
An 8210 notice is a serious event that, if mishandled, could jeopardize your career in the financial services industry. All registered representatives must respond on time and provide the requested information. Failing to do so can cost you your license and bar you from the industry.
Our firm has decades of experience advising clients on complex and serious FINRA investigations. If you received an 8210 letter from FINRA, we invite you to contact Lewitas Hyman today by calling (312) 291-4600 or filling out our online contact form to schedule your free consultation.
Headquartered in Chicago, we represent financial professionals nationwide.