If you’re a licensed California financial professional who helps clients invest and grow savings, you’re undoubtedly familiar with the acronym FINRA.
Spelled out, that shorthand designation denotes the federal Financial Industry Regulation Authority.
We note FINRA’s central role in the securities realm on our license-defense website at the established California Century Law Group, LLP. We stress the agency’s mandate to “protect investors’ rights through the regulation and oversight of financial professionals.”
If you’re a certified public accountant, financial adviser, stockbroker or other individual with management power over client investments, that means you.
Many licensed professionals never formally interact with FINRA regulators. Others do, though, and often via an agency probe that alleges their wrongdoing in some capacity.
The downsides linked with a FINRA investigation and formal hearing outcome can be sharp and enduring. Targeted individuals are routinely slapped with heavy fines. Some suffer criminal sanctions. Suspension or revocation of hard-earned licensing credentials is a common result.
Concerned professionals should know that none of those adverse outcomes is preordained, though. Seasoned license-defense advocates intimately familiar with FINRA rules and processes routinely promote client results that maximally mitigate potential downsides.
One strategy that often avails is demonstrated cooperation with FINRA hearing examiners. A recent article on that topic notes that individuals can “earn credit for extraordinary cooperation” in an investigation.
Being upfront and timely with relevant disclosures is wise for a hearing participant in any case, of course. In fact, FINRA states that questioned financial professionals already have a base/threshold duty to cooperate with examiners.
Agency principals concede, though, that things can get murky concerning guidelines. As a result, the agency recently issued what it intends as a clarifying update concerning extraordinary cooperation.
Individuals seeking to probe the details of what that means can access relevant information via FINRA’s website.
Essentially, assessment of “extraordinary” entails a bit of subjectivity and a sliding-scale view of conduct. FINRA’s head of enforcement stresses that the agency will note and respond favorably to individuals who “voluntarily and proactively” provide the agency with relevant information. That implies cooperation that is “materially different” from what is already mandated.
A FINRA investigatory probe is a serious and complex exercise with potentially dire consequences in a given case. Questions or concerns regarding an agency hearing can be directed to license-defense attorneys who have a demonstrated record of client advocacy in this specialized area of law.
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