How Do FINRA Inquiries Start and How Should I Respond?

Financial advisors and other professionals in this industry understand that the Financial Industry Regulatory Authority (FINRA) oversees and regulates brokerage firms and exchange markets, taking action when it suspects a rule violation has occurred. As one possible example, if a customer lodges a complaint about a financial advisor or brokerage firm, FINRA may investigate the complaint and determine whether disciplinary action is necessary. Here’s a brief overview of how the inquiry process works and what to do if FINRA contacts you about an upcoming investigation.

Actions That Trigger a FINRA Inquiry

There are many activities that can launch a FINRA inquiry. When disclosures on U4 or U5 forms, often arising from customer or broker-dealer complaints, are published, FINRA examines it to determine whether a violation of any securities rule, regulation, or standard of conduct may have occurred. These disclosures may be financial, refer to liens or disputes, or pertain to arbitrations or judgments against an advisor. It’s up to FINRA to open an investigation into the specific circumstances and nature of the complaint.

FINRA’s Inquiry Process

Once FINRA becomes aware of a particular disclosure, it will open an investigation to determine whether a violation has occurred. FINRA’s goal is to enforce the industry standards of conduct, but this means that even misguided or downright false allegations can trigger an investigation. Going through the inquiry process can be stressful and overwhelming, especially if these allegations are unfounded. However, you must participate in and respond to FINRA’s requests to avoid additional hardship. Depending on the course of the investigation, you may be asked to participate in interviews, hand over documentation, or appear at a hearing before the matter is resolved.

Protecting Your Professional Reputation

At the first hint of a FINRA inquiry, it’s helpful to enlist the services of a trusted securities law attorney who can guide you through the process and advise you on what steps you need to take. Responding effectively to FINRA’s request for information can be challenging, which is why your lawyer will help you navigate these obligations successfully. Together, you can move toward clearing your name and defending your professional reputation.


If you need help navigating a FINRA inquiry or investigation, contact Judex Law LLC today at (303) 523-4022 to get started with an experienced and trusted securities law attorney.

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