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FINRA Enforcement Defense Lawyers

November 8, 2020

The Spodek Law group is a premier, and service driven, FINRA enforcement defense law firm. Our attorneys understand how difficult this process is, and that you need an experienced law firm to help you. We regularly advise individuals and companies regarding FINRA compliance. finra‘s top priority is to make sure investors confidence in the securities market remains consistent. The enforcement department in FINRA is tasked with securities violations, and when necessary – bring disciplinary action against firms and associated staff. FINRA’s enforcement department has the authority to fine, suspend, or ban brokers and firms from the industry. The enforcement department is very effective, and handles a wide array of investigations and cases. The enforcement department works with the FINRA departments and offices, like Member Regulation and Market Regulation to conduct it’s job. For example, the FINRA enforcement department works with member regulation – when investigating suspected rule violations, in the course of examinations, and when reviewing customer complaints. If deemed necessary, the Enforcement department will take disciplinary action.

FINRA can also start investigations based on a wide array of sources like examination findings, FINRA findings, complaints, tips, surveillance reports, referrals from other agencies, or referrals from other departments. FINRA can take disciplinary action through two procedures: a settlement or formal complaint. In a settlement, the firm or broker can settle with FINRA through a Letter of Acceptance, Waiver and Consent. Formal complaints are filed and heard before FINRA’s office of hearing officers. The officer will assign the case to a professional officer who ensures the complaint is resolved fairly and quickly.

Regardless of which way you go, it’s advisable to speak to a FINRA enforcement defense lawyer.

Examples of Cases We Can Handle

We handle SEC and FINRA examinations, and enforcement actions
We provide FINRA and SEC rule compliance advice and counsel
We draft, or review, documents like promissory notes, agreements, etc
We assist with registration issues, disqualification cases involving the MC-400 process with FINRA
Provide help with Form U4/U5/BD disclosures, including expungement of negative disclosures
Arbitration matters involving FINRA dispute resolution
Representation of brokers transitioning from one firm to another
Representation for brokers facing CFP board investigations
Registration issues with the SEC and regulators
Reviewing client advisory agreements
Defense of SEC examinations
Defense of SEC enforcement actions

What is FINRA?

FINRA (Financial Industry Regulatory Agency) is an independent agency that ensures broker-dealers act in fair and compliant manners with regulations set forth by other regulatory agencies. Unlike the Securities and Exchange Commission that deals with upholding the integrity of financial markets as a whole, FINRA is responsible for monitoring the activities of the actors in the financial markets. They oversee approximately 3,900 brokerage firms and 630,000 individual brokers and process, on average, 50 billion transactions every day. FINRA is also not a government agency. They are commissioned by Congress, but operate as a not-for-profit on the behalf of investors and not supported by taxpayer dollars.

Duties of FINRA

FINRA is responsible for administering licenses to qualified investment professionals, checking that there is proper disclosure for any securities related advertising, write and enforce rules that govern the actions of broker-dealer firms and individual securities brokers, and educate investors about our financial markets.

How FINRA Achieves Its Goals

FINRA’s primary responsibility is protecting investors by ensuring that whenever an investor buys a product, that product comes from a reputable and ethical dealer. FINRA requires that any broker in the U.S. be licensed and registered with FINRA. Depending on what products a broker wants to sell, FINRA requires him/her to acquire the relevant license. For example, if an individual wants to sell stocks, he/she must pass the licensing exam for a Series 7. There are many more licenses that represent various products available for sale and FINRA checks that any dealer has the right licenses to sell those products.
Besides regulating who can sell what products, FINRA also creates rules that bind broker-dealers to act in ethical and fair manners. These regulations come from investors, the SEC, and sometimes the brokers it oversees. Members who act against the regulations set by FINRA can be subject to fines, suspensions, and possible expulsion from markets depending on the severity of the infraction. In 2016, FINRA expelled 31 firms, suspended 727, and barred another 517 from doing business. In 2017, FINRA ordered $133.6 million in restitution to investors and took 1,369 disciplinary cases against offenders.

Does FINRA Work?

Without FINRA, it would be much easier for broker-dealers to take advantage of regular investors who do not possess the sophisticated tools to fully understand financial markets. FINRA acts to hold those dealers to a high standard so that investors know their money is safe in the hands of someone else and so that investors can learn more about the markets through the free tools FINRA provides. As in any large, developed economy, FINRA has its work cut out for them and might not catch every infraction. However, without FINRA and other regulatory deterrents, offenses would occur more often and with more severity. Even with FINRA monitoring brokers, the numbers above suggest some are willing to take the risk of acting immorally. Even in those instances, FINRA strives to protect the integrity of the markets and repair damages brought against investors.

FINRA Enforcement Defense Lawyer
How Financial Industry Regulatory Authority (FINRA) Helps the Securities Industry

The organization responsible for the oversight of securities firms and securities brokers activities is the Financial Industry Regulatory Authority (FINRA). Congress has authorized this organization to help regulate various areas of the financial industry in the United States. The mission of FINRA is to significantly decrease the opportunities for unscrupulous businesses or individuals to take advantage of honest investors. This is done by carefully overseeing the players in the United States financial markets and more.

Board of Governors
FINA is operated by a Chief Executive Officer of NYSE Regulations, a Chief Executive Officer as well as eleven Public Governors. There are also ten Governors including an Independent Dealer, Floor Member Governor, three Small Firm Governors, three Large Firm Governors, and a Mid-Size Firm Governor. The Large Firm, Small Firm, and Mid-size Firm Governors are all elected to their positions with FINRA.

One of the main functions of FINRA is to monitor financial markets to immediately detect any type of fraudulent activity that may occur. It has the personal, as well as technical capabilities, to provide a detailed analysis of financial markets. FINRA can determine when any type of activity in the financial markets is an anomaly or is associated with fraudulent activity and more.

Investor Education
FINRA has shown the most effective way to keep the public safe from financial fraud is to have them educated and informed about investing as well as how to discover investing practices that are unethical. FINRA provides the public with various interactive tools and information about the financial markets. This information is designed to help investors easily detect anything that seems to be a financial scam. It also helps investors analyze funds. FINRA’s database is available to investors so they know if they are dealing with a broker or brokerage firm that is properly licensed and registered.

Compliance Enforcement
Brokerage firm members of the regulatory authority and registered brokers have all agreed to comply with FINRA’s by-laws. These cover the rules pertaining to how a brokerage business is operated and how investment products are promoted. Should a brokerage firm or broker not follow these standards; they could face a disciplinary action. Should an investor file a complaint about suspicious investment activity with FINA, an investigation will immediately be started into the behavior of its member broker or brokerage firm.

Investment Rules
FINA is responsible for creating investment rules for those who are active in the securities industry. The rules it creates are based on input from different areas of the industry. This includes member brokers, investors as well as the SEC, and more. FINA will draft new investment rules when necessary. They are then carefully reviewed by Financial Industry Regulatory Authority committees. The final step in the process is for the rules to be submitted to the SEC for review before becoming official.

The largest forum designated for arbitration is operated by FINRA. It is designed to provide resolutions between member firms and their customers. FINRA will also provide arbitration between brokerage firms and their employees. All agreements that define the relationship between stockbrokers and their clients will have a clause concerning mandatory arbitration. This requires investors to waive their right to court action and resolve their dispute using arbitration. It is still possible for class action cases to be permitted to proceed in the court system. Arbitration contracts are sometimes rejected in different situations.

FINRA works out of two different headquarters located in New York City and Washington, D.C. FINRA also has 20 regional offices that are located in different parts of the United States. Congress is responsible for authorizing the creation of FINRA and its designated activities. FINRA remains a self-regulated organization. It creates and maintains high standards for its member investment firms and brokers. FINRA is known for promoting integrity and competency in the securities industry.



Spodek Law Group have offered me excellent support and advice thru a very difficult time. I feel I've dealt with someone who truly cares and wants the best outcome for you and yours. I'm extremely grateful for all the help Spodek Law Group has offered me. I can't recommend them enough.

~ David Bruce

Spodek Law Group was incredibly professional and has given me the best advice I could wish for. They had been helpful and empathetic to my stressful situation. Would highly recommend Spodek Law Group to anyone I meet.

~ Rowlin Garcia

Best service I ever had. Todd is absolutely class personified. You are in the safest hands with spodek. They have their clients interest in mind.

~ Francis Anim

Spodek Law Group

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