Receiving a FINRA Wells Notice can come as a shock, especially since these types of notices aren’t usually expected. However, the good news is that a FINRA Wells Notice isn’t an official finding of wrongdoing and doesn’t directly indicate a legal problem. But it can come with serious legal implications, which is why you need to know how to respond to this type of notice and what happens next.
If you have received a FINRA Wells Notice, you need to consult with a FINRA investigation lawyer in Colorado. At Judex Law, LLC, founding attorney, Tosh Grebenik, is here to help you understand what a financial advisor Wells Notice is and the steps you need to take next. So, keep reading to find out what to expect during the FINRA enforcement process and how you should respond to this notice.
What Is a FINRA Wells Notice?
Firstly, if your firm receives a FINRA Wells Notice, this is a formal communication that comes from the Financial Industry Regulatory Authority. The notice itself is used to inform you that FINRA’s enforcement staff has finished an investigation and plans on recommending disciplinary charges.
It’s important to understand that this notice is not a final finding of wrongdoing or a formal legal charge; it simply notifies you that enforcement staff has found sufficient legal and factual basis to proceed with possible disciplinary charges.
Although a FINRA Wells Notice isn’t an official legal finding of wrongdoing or a formal charge against your firm, you still need to take it very seriously. You will need to respond within 30 days of receiving this notice as a way of addressing the FINRA’s allegations.
Before you move forward with responding to a financial advisor Wells Notice, you should get the help of a FINRA enforcement attorney who can help you understand what comes next.
What Should You Do After Receiving a Wells Notice?
So, if you have received a FINRA Wells Notice, you’re probably wondering what to do next. Here is the step-by-step process you should follow after receiving this notice so that you can respond appropriately:
- Review the notice carefully so that you fully understand the allegations and the FINRA enforcement staff’s findings.
- Keep track of when you received the notice so that you can respond within the 30 day deadline.
- Get legal representation from a FINRA defense attorney before you move forward with a response.
- Gather relevant documentation that directly coincides with the allegations mentioned in the notice.
- Follow any applicable reporting or disclosure requirements for your firm.
Understanding a Wells Submission
When you respond after receiving a FINRA Wells Notice, this is called a Wells Submission. It is a formal written response delivered to FINRA that gives you the opportunity to present your side of the story. For instance, you can use a Wells Submission to present factual evidence, mitigating circumstances, and legal arguments that directly correlate with FINRA’s allegations.
When FINRA receives your Wells Submission, it’s evaluated by enforcement staff and reviewed by FINRA’s Office of Disciplinary Affairs. Once both reviews are done, a final decision will be made to decide if a formal complaint is necessary or not.
Before you send a Wells Submission, you first need to understand that this isn’t confidential or privileged information. So, anything you include in your Wells Submission could potentially be used against you later on during enforcement proceedings, regulatory or criminal actions, or civil lawsuits.
What Happens Next?
You may experience one of several different types of outcomes after making a Wells Submission in response to a FINRA Wells Notice. And the best way to prepare for this uncertainty is to understand what the possible outcomes could be and what they could mean for your firm.
So, here are some decisions that FINRA may make after reviewing your Wells Submission:
- No action: The best possible outcome is if the FINRA staff decide not to recommend any charges, closing the case. However, keep in mind that this outcome is rare.
- Modified charges: FINRA staff may choose to modify or reduce the specific charges they originally wanted to pursue based on the evidence you provided in your submission.
- Settlement offer: FINRA may propose a settlement offer, which can resolve the matter through an acceptance, waiver, and consent agreement without the need for a full hearing or trial.
- Formal complaint: If none of the above outcomes apply, FINRA will file a formal and public complaint, which will usually begin the process of litigation before a FINRA hearing panel.
Your attorney can help you better understand which outcome is more likely for your situation when you make your Wells Submission. They can also help you respond to whatever decision you receive, especially if a defense strategy is needed for formal litigation.
Get the Help of an Experienced FINRA Enforcement Attorney
Has your firm received a FINRA Wells Notice unexpectedly? If so, you will need to know how to respond to this notice and what to expect during the investigation process. At Judex Law, LLC, we are here to help you understand what this notice means and the specific steps you should take next to protect your firm. For legal representation, reach out to our Bloomfield, Colorado office today by calling us directly at 303-523-4022 to get the help of an experienced financial advisor defense attorney.
FAQ Section
Does a Wells Notice mean FINRA has decided I violated the rules?
No, this notice simply means that FINRA has completed an investigation and has the intention of recommending disciplinary charges. So, while this notice isn’t the same as a final finding of wrongdoing or a formal legal charge, it can result in these outcomes if not addressed appropriately.
Do I have to make a Wells Submission?
You’re not legally required to make a Wells Submission, as this depends on a case-by-case basis. Whether you do or don’t make a Wells Submission is a strategic decision that should be evaluated by you and your FINRA defense attorney.
Is a FINRA Wells Notice reportable?
Receiving a FINRA Wells Notice can trigger mandatory Form U4 disclosure obligations.