FINRA Rule 8210, or the "Provision of Information and Testimony and Inspection and Copying of Books, Records and Accounts" rule, is a crucial tool that the Financial Industry Regulatory Authority (FINRA) utilizes to protect investors and maintain fair and orderly markets. It empowers FINRA to gather information and evidence from FINRA members, associated persons, and other individuals under its jurisdiction in connection with investigations, examinations, and disciplinary proceedings.
What is the purpose of FINRA Rule 8210?
FINRA Rule 8210 serves several key purposes:
Investigation Enforcement: It allows FINRA to gather information and evidence to investigate potential violations of FINRA rules or federal securities laws.
Examinations: It facilitates FINRA's examinations of FINRA members and associated persons to assess their compliance with FINRA rules and federal securities laws.
Disciplinary Proceedings: It enables FINRA to gather evidence during disciplinary proceedings against FINRA members, associated persons, and other individuals.
What types of information and evidence are gathered under FINRA Rule 8210?
FINRA Rule 8210 empowers FINRA to obtain a wide range of information and evidence, including:
Books and Records: FINRA can request the production of books and records related to the matter under investigation or examination.
Testimony: FINRA can request interviews and sworn testimony from individuals involved in the matter.
Documents and Other Evidence: FINRA can request production of documents, emails, communications, and other relevant materials.
Who is subject to FINRA Rule 8210?
FINRA Members: Registered broker-dealers and investment advisers that are members of FINRA.
Associated Persons: Individuals who work for FINRA members and are subject to FINRA regulations.
Other Individuals: Individuals who may have relevant information or evidence related to FINRA investigations or examinations.
What are the requirements for responding to FINRA Rule 8210 Requests?
When FINRA issues a request for information or testimony under Rule 8210, the individuals or entities subject to the request are obligated to cooperate fully and promptly. This includes:
Providing Accurate and Complete Information: Individuals must provide accurate and complete information to the best of their knowledge.
Providing Documents: Individuals must produce the requested documents in a timely manner.
Attending Interviews: Individuals must attend interviews when requested and answer questions truthfully and under oath.
Refraining from Obstructing or Delaying the Investigation: Individuals must not obstruct or delay the investigation in any way.
I have received a FINRA 8210 request. What should I do?
Receiving a FINRA 8210 request can be a stressful and confusing experience. Here are the steps you should take:
1. Review the 8210 Request Carefully:
Read the request thoroughly and understand what information or testimony FINRA is requesting;
Pay attention to deadlines and response requirements;
Identify the specific matter under investigation or examination; and
Ascertain whether you are the target of the investigation or simply a witness.
2. Contact an Attorney:
It is crucial to seek legal counsel from a qualified attorney experienced in FINRA investigations and Rule 8210 requests. An attorney can assist you with:
Understanding your rights and obligations under FINRA Rule 8210;
Providing advice on how to respond to the request in a way that protects your interests;
Representing you in any interviews or hearings with FINRA; and
Negotiating with FINRA on your behalf.
3. Do Not Destroy Any Evidence:
Preserve all documents, emails, communications, and other materials that may be relevant to the matter under investigation or examination. Do not destroy or delete any evidence, even if you believe it is damaging.
4. Do Not Discuss the Matter with Anyone:
Refrain from discussing the matter with anyone other than your attorney. This includes colleagues, friends, and family members.
5. Respond to the Request Promptly:
Meet all deadlines set by FINRA and comply with their requests for information and testimony. Failure to respond promptly or properly could have serious consequences.
6. Cooperate Fully with FINRA:
Be truthful and complete in your responses to FINRA's requests. Do not withhold any information or mislead FINRA in any way.
7. Keep Detailed Records:
Keep a record of all communications you have with FINRA and your attorney. This will be helpful if any issues arise later.
Consequences of Failing to Comply with FINRA Rule 8210
Failing to comply with a FINRA Rule 8210 request can have serious consequences, including:
Cease-and-Desist Orders: FINRA can issue cease-and-desist orders to compel compliance or impose restrictions on the individual or entity.
Disciplinary Actions: FINRA can pursue disciplinary actions, such as fines, suspensions, or expulsion from FINRA, for non-compliance.
Legal Action: Individuals or entities who willfully refuse to comply may face legal action from FINRA or the Securities and Exchange Commission (SEC).
Attorney Ostrosky has represented numerous advisors and brokers in respond to FINRA 8210 inquiries. Time is of the essence as FINRA generally provides short deadlines to respond. If you've received a 8210 or other regulatory inquire, don't delay and contact us immediately.