Professionals and firms throughout the securities and financial industries recognize the importance of understanding the rules set forth by the Financial Industry Regulatory Authority (FINRA). FINRA’s mission is to “protect investors and safeguard the integrity of our vibrant capital markets to ensure that everyone can invest with confidence.” In order to carry out this mission, FINRA’s enforcement and compliance departments investigate complaints or accusations of potential rule violations and firms or individual brokers not acting in good faith. When a complaint is lodged, FINRA Rule 8210 “grants FINRA staff and adjudicators authority to inspect and copy the books, records and accounts of member firms, associated persons and other persons over whom FINRA has jurisdiction relating to investigations, complaints, examinations or proceedings.” In other words, FINRA can formally request member firms or individuals to appear for an On-The-Record (OTR) interview, which can be somewhat daunting and even intimidating for those unfamiliar with the process. It’s usually worth enlisting the guidance and support of an experienced and knowledgeable FINRA enforcement defense attorney who can help you understand your rights, obligations, and options when facing this request. This post will provide a brief overview of FINRA’s Rule 8210 and how working with a trusted FINRA investigation lawyer can assist you with how to prepare for a FINRA OTR interview strategically and effectively.
Understanding FINRA Rule 8210
Essentially, FINRA Rule 8210 “serves as FINRA’s primary tool to obtain information necessary to conduct investigations, including investigations concerning a member firm’s and associated person’s obligation to observe high standards of commercial honor and just and equitable principles of trade.” It’s important to note that this rule was enacted to endow FINRA with the power to request information, records, or interviews at any time so that it can carry out its mission to protect investors from firms or advisors acting in bad faith. Anyone who is registered with FINRA (i.e., individuals, firms, and associated persons) may be subject to Rule 8210 requests at any time. Some of the most common reasons for these requests typically stem from investigations into potential rule violations, complaints lodged by customers, reports of alleged fraud, or market manipulation. Those who receive Rule 8210 requests and do not comply with the terms can face significant consequences, such as suspension or a permanent removal from the financial industry. While receiving this notice can be overwhelming and daunting, it’s essential that you respond strategically and promptly to minimize the potential for negative consequences.
How to Respond to a FINRA 8210 Request
As soon as you receive a FINRA 8210 request, it’s important to review the document carefully and take note of any deadlines. Next, you can contact an esteemed securities law firm for FINRA defense to discuss the specifics of your situation with a highly qualified attorney. Your experienced FINRA defense lawyer can help you understand how to prepare for a FINRA OTR interview and gather all relevant documents and information in a timely manner. When you have a knowledgeable attorney by your side, you are more likely to avoid common pitfalls, such as missing deadlines, providing incomplete or misleading responses, assuming FINRA is conducting a routine inquiry, and responding without legal guidance. Together, you and your attorney can respond strategically so that you can improve your chances of a favorable and fair outcome.
What to Expect in a FINRA On-The-Record (OTR) Interview
So, what does a FINRA OTR interview entail? For the most part, it is similar to a deposition, as the OTR interview is recorded by a court reporter so that any statements can be entered into the official record. The purpose of a FINRA OTR interview is to help the investigators clarify the issues under review while giving the firm or individual under review the opportunity to respond to or explain these matters. An OTR interview is conducted under oath and in the presence of FINRA enforcement staff, which can be intimidating without the counsel of an experienced attorney by your side.
How to Prepare for a FINRA OTR Interview
The first step is to find a highly experienced securities law attorney who specializes in FINRA enforcement matters to help you prepare for the upcoming OTR interview. Your attorney can help you review potential questions and examine all relevant case details so that you are more poised for the interview. You can develop response strategies to any unexpected questions that may arise so that you avoid making any statements that could be used against you later on.
Common Questions Asked in a FINRA OTR Interview
Although you will not know the exact questions that FINRA investigators may ask you during the OTR interview, your attorney can help you prepare for some of the questions that are likely to arise. Generally speaking, questions related to business practices, communications, compliance procedures, and specific transactions tend to arise, so you and your lawyer can prepare for these topics. Additionally, inquiries about prior regulatory issues or disciplinary actions may be asked, so it’s important that you work with your attorney to create a strategy for responding to these potential questions. Throughout the interview, it’s best to stick to the facts and avoid speculation. Try to stay calm and composed under pressure, and remember that you can state that you do not recall specific information if that is the case—which is a better strategy than providing speculative or inaccurate information.
Legal Strategies for FINRA Enforcement Defense
While you are not required to hire an attorney to represent you during a FINRA OTR interview, doing so is highly recommended. Working with an attorney can help you navigate responses, protect your rights, and mitigate potential risks along the way. Moreover, seasoned FINRA enforcement defense attorneys can negotiate with FINRA and potentially resolve the matter in a fair and favorable manner. Depending on the specifics of your situation, the FINRA investigation may lead to any number of outcomes, such as a case dismissal, settlement, fines, or suspensions. With a trusted and dedicated attorney by your side, you can trust that they will work hard to reduce potential penalties by negotiating settlements and consent agreements or presenting mitigating factors in the overall defense strategy.
If you have received a request for a FINRA On-The-Record interview, it’s natural to feel uncertain about what this process entails. That’s why Judex Law, LLC, is prepared to offer you the customized legal guidance and support you need to navigate this request with greater composure and certainty. Please contact our office today at (303) 523-4022 to get started with a dedicated and highly experienced FINRA enforcement defense attorney.
