Monday, March 7, 2016

Regulatory Investigations Require Experienced Counsel

A broker who receives a FINRA OTR notice, or a subpoena from the SEC must be aware that his prior customer and disciplinary history may significantly impact how the investigation is conducted, what charges will be brought and what penalties may apply. For this reason, it is imperative that anyone called to give testimony or documents to financial regulators seek the advice and counsel of an experienced lawyer as soon as possible after receiving the OTR letter or subpoena

The securities regulatory system is structured so as to increase punishment on repeat offenders. FINRA believes that disciplinary sanctions should be more severe for recidivists and has structured the disciplinary process so as to impose progressively escalating sanctions on recidivists up to and including a permanent bar and expelling firms.

FINRA has clearly stated that sanctions imposed on recidivists should be more severe because a recidivist, by definition, already has demonstrated a failure to comply with FINRA’s rules or the securities laws. The imposition of more severe sanctions emphasizes the need for corrective action after a violation has occurred, discourages future misconduct by the same respondent, and deters others from engaging in similar misconduct. Adjudicators should always consider a respondent’s relevant disciplinary history in determining sanctions and should ordinarily impose progressively escalating sanctions on recidivists. FINRA also encourages more severe sanctions when a respondent’s disciplinary history includes significant past misconduct that: (a) is similar to that at issue; or (b) evidences a reckless disregard for regulatory requirements, investor protection, or market integrity.


An investigation by FINRA, the SEC, or a state securities administrator can become a life changing event, with significant fines and suspensions. If you find yourself faced with a FINRA 8210 Request, or an SEC subpoena, you need an experienced, qualified, time-tested FINRA attorney who has the experience to provide excellent representation. I am proud of my reputation as an aggressive defense attorney, who has represented dozens of brokerage firms and hundreds of individual brokers across the country, in securities investigations.

Every case is defensible, and that defense starts with the initial contact with the regulators.

Mark J. Astarita, Esq.

Sallah Astarita & Cox, LLC
100 Park Avenue, Suite 1600
New York, New York 10017

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