Regulatory Investigation Services

Financial investigations

HLBS Law has extensive experience handling investigations that financial professionals are facing, whether they are formal or informal inquiries into perceived violations of law, code, or policies by different states or agencies.

These investigations are typically launched when a financial advisor has received a customer complaint or is the subject of an internal investigation or a termination. We represent professionals throughout the investigation process to protect their rights and provide legal guidance.

Types of Investigations

Failure to Disclose Conflicts of Interest

Fraud

Improper Use of Customer Information

Mishandling of Client Funds

Potential Market Manipulation

Insider Trading

Unauthorized Trading

Violation of Suitability Standards

How HLBS Law Can Help

Expert Investigation Support

HLBS Law supports financial professionals through the investigation process, which can be lengthy and stressful. We are there every step of the way to protect your rights, ensure an ethical and fair investigation, and help you determine the next steps.

Comprehensive Legal Guidance

We have an extensive network of attorneys and can handle FINRA, JAMS, and AAA investigations in most states. Our team also has experience representing clients who are being investigated by the CFP Board.

SEC Inquiry Experts

In matters of SEC investigations, extreme caution should be taken because the SEC has extraordinary power given to it by Congress. Whether you are facing an informal inquiry from the SEC or have received a formal subpoena from them, HLBS Law can help. We will review your case and decide if we can take it on or refer it to our colleagues to ensure you get the expert legal guidance you need.

FINRA Investigations

The most common investigations we see are by the Financial Industry Regulatory Authority (FINRA). This is called an 8210 inquiry letter. Inquiry letters typically ask questions and request documents surrounding the issue at hand.

Most inquiry letters result in 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, a settlement can typically resolve the investigation. This will result in a public disclosure and can sometimes be accompanied by a monetary fine and a suspension, which can impact your career in the financial services sector.

As the investigation continues, the more serious alleged violations can result in FINRA issuing a Wells Notice. This means formal disciplinary action will begin with enforcement and may conclude in a final hearing before a panel. Inquiry letters and Wells Notices are not matters to take lightly, so it’s crucial to retain legal counsel throughout this process.

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State, SEC, and other Regulatory Investigations.

You may also be facing state investigations, which can result in no action, a warning, or a settlement. Financial professionals are subject to investigations in any state where they are licensed, and those registered with different states and agencies can experience multiple simultaneous investigations.

Other investigations include Certified Financial Planner (CFP) investigations by the CFP Board, the United States Securities & Exchange Commission (SEC), and others such as your state’s insurance or real estate division.

These investigations can be similar to FINRA in that a response is required, a settlement may be reached, and disciplinary action can be taken against you if the investigation finds evidence of wrongdoing.

It’s imperative to work with an experienced attorney who can support you through these investigations to protect your rights and help the process go more smoothly.

Frequently Asked Questions

I just received an 8210 letter from FINRA saying I am under investigation–what do I do?

You need to do two things. First, disclose the investigation to your compliance department in accordance with their disclosure requirements. Most firms require disclosure within two days. The second thing you need to do is contact a law firm experienced with FINRA investigations, such as HLBS Law. It is critical to respond quickly, consistently, and precisely. HLBS Law can guide you through this process.

What types of investigations do FINRA, JAMS, and AAA conduct?

FINRA, JAMS, and AAA conduct investigations into various financial activities to ensure compliance with regulations and protect investors. These investigations can include inquiries into misconduct such as mishandling of client funds, potential market manipulation, insider or unauthorized trading, and violation of suitability standards. These investigations aim to maintain market integrity, uphold investor confidence, and enforce regulatory compliance within the financial industry.

What penalties can FINRA impose?

FINRA has the authority to impose various penalties on individuals and firms that violate its rules and regulations. These penalties can include fines, suspensions, expulsion from the industry, restitution payments to affected parties, and additional supervisory measures. The severity of the penalties depends on the nature and extent of the violation, as well as any mitigating or aggravating factors.

What should I expect when under investigation?

Individuals and firms should expect thorough scrutiny of their activities, including examination of records, interviews with relevant parties, and analysis of trading data during an investigation. Investigators will aim to uncover any potential violations of securities regulations and determine the extent of the misconduct.

Depending on the complexity of the case, investigations can take weeks to months to complete. Throughout the process, cooperation with the entity and transparency regarding the relevant information are essential. Upon conclusion, the state or agency will communicate its findings and any enforcement actions, such as fines or sanctions, if warranted.

What is the cost to hire a lawyer at HLBS Law to guide me through the investigation?

HLBS only requires an initial 5k retainer to start your representation for this matter. We charge this because our goal is to eliminate the investigation with a responsive letter. If the investigation proceeds, HLBS Law will explain the next steps and what the pricing would look like from there, including our estimated cost to resolve your case based on the specific facts and circumstances.