The Latest Updates on FINRA Rule 4111

By now, brokerage firms and financial advisors have probably heard about the new rule instituted by the Financial Industry Regulatory Authority (FINRA). Rule 4111 aims to impose greater penalties on broker-dealer firms that exhibit a “significant history of misconduct.” This rule, which became effective on January 1, 2022, still requires more clarity on the specific protocols and obligations of firms designated as “restricted.” Here’s the latest on the implementation of FINRA Rule 4111 and what it could mean for financial advisors and firms moving forward.

FINRA CEO Issues Statement on Rule 4111

FINRA CEO Rob Cook recently stated that FINRA would be moving forward with its crackdown on high-risk broker-dealer firms this year. He clarified, “We’re probably going to be making some amendments to that regime as necessary going forward. For example, FINRA will issue a proposal to disclose on BrokerCheck the status of firms that are restricted firms under the rule and will be issuing in the coming weeks a notice about the first evaluation phase of that rule.” Additionally, FINRA announced that June 1, 2022, will be the first “Evaluation Date” for firms under this rule.

What the Evaluation Date Means

The evaluation date refers to the beginning of the process of calculating whether FINRA should designate a firm as restricted. According to FINRA’s most recent notice, “the Evaluation Date is not the date when FINRA would actually perform the annual calculation of which member firms meet the Preliminary Criteria for Identification.” Instead, the date marks the beginning of the calculation and evaluation period “to account for the time between when relevant disclosure events occurred and when firms must report those events on the Uniform Registration Forms.” At the conclusion of the notice, FINRA acknowledged that it will be making additional resources available to help broker-dealers navigate the nuances of Rule 4111.

Speak With an Experienced Securities Law Attorney Today

If you are confused about the latest FINRA rules, you are not alone. These new rules are difficult to understand, especially as they may lack the specific information you need to make sense of your situation. Reaching out to a trusted and experienced securities law attorney is a great way to discuss your concern and explore your options moving forward. Together, you can determine the most strategic course of action to help you obtain a favorable outcome.


Call Judex Law, LLC, today at (303) 523-4022 to discuss your securities law matter with a dedicated and friendly attorney.

Table of Contents