Investigations

Formal or informal inquiries into perceived violations of law, code, or policies.

FINRA Investigations

HLBS Law has a lot of experience handling investigations and the most common investigations we see are by FINRA. FINRA investigations begin with a letter from FINRA, and this is called an 8210 inquiry letter. Investigations are typically launched when a financial advisor has received a customer complaint, subject of an internal investigation, and/or a termination. Inquiry letters typically ask questions and request documents surrounding the conduct at issue.

Most inquiry letters result in a letter of “no action” or a “letter of caution.” Both letters are not disclosable on the CRD or BrokerCheck. Some investigations by FINRA can lead to formal questioning in what is called “on the record,” more commonly known as OTR. This questioning is under oath and the rules of evidence typically do not apply.

Depending on the conduct and investigation, settlements are entered into to resolve the investigation, which will result in a public disclosure, and can sometimes be accompanied by a monetary fine and a suspension. These agreements are called Acceptance, Waiver, and Consent (“AWC”). AWCs have a lot of collateral consequences that impact your career in the financial services sector.

As the investigation plays out, the more serious alleged violations can result in FINRA issuing a wells notice. This means formal disciplinary will begin by enforcement and may conclude in a final hearing before a panel. 8210 letters and wells notices are serious and HLBS Law recommends you hire an attorney.

State Investigations

State regulators conduct similar investigations as discussed above. These investigations are initiated by similar circumstances: customer disputes, termination, internal investigations, referrals, anonymous tips, and settlements with other regulators.

State investigations can result in no action or a warning. Settlements can be entered as well; most states refer to them as stipulation and consent orders. Financial professionals are subject to any state in which they are licensed to transact business, and it is possible to be investigated by multiple states. In certain cases, financial professionals are hybrid: registered with states and FINRA, which can make multiple investigations possible.

HLBS Law has a large network of attorneys and can handle investigations in most states. As with FINRA investigations, HLBS Law recommends that you retain an attorney for this type of investigation.

Certified Financial Planner (CFP) Investigations

A CFP designation for a financial professional can bring a lot of upside, but CFPs are not immune to customer disputes and terminations. The CFP Board can launch investigations for any of the reasons discussed above. HLBS Law has a lot of experience representing clients who are being investigated by the CFP.

Like what was said above, there is an inquiry letter requesting documents and asking questions. The CFP board can call an informal questioning of a client on the records. Settlements can be entered into and a final hearing on the accusation can take place.

HLBS Law recommends you hire an attorney for these types of matters due to the high standard the CFP holds for this designation, and it can be risky to proceed on your own.

United States Securities & Exchange Commission (SEC)

The SEC has extraordinary power bestowed upon it by congress and any investigation by the SEC should be taken with extreme caution. HLBS Law recommends you immediately hire an attorney for these matters as the SEC has both civil and criminal powers. If you are facing an informal inquiry from the SEC, contact us today. If you have received a formal subpoena from the SEC, we will review your case and decide if we can take the case on or refer it out to our colleagues, depending on the scope of the investigation.

In the most extreme of situations where the SEC has filed a civil action against you in federal court, HLBS Law will review the case and decide on the best course of action. Most often, that is us referring the matter to our colleagues at a bigger firm. The SEC has unlimited resources to prosecute these matters and sometimes a bigger firm is the best option for our clients.

Other Investigations

HLBS Law has handled investigations by less common regulators, designations, and firms. Examples of this can be your state’s insurance or real estate division. If you are facing an investigation, you do not have to face it alone. We are happy to guide you. Contact us today.