FINRA Rule 8210

7 replies [Last post]
L_E_K's picture
Offline
Joined: 2010-01-07

Does anyone know anything about FINRA Rule 8210? I was terminated from my previous firm for what I feel was a pretty minor event. I got my U-5 in the mail and the reason stated was "violation of company policy". My former manager basically admitted after the fact that I got screwed and that HR was looking for any reason to reduce staff. All the U-5 anwsers are “no” since the event was not investment related, there was no complaint and there was no violation of industry rules or regulations. <?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
 
So now there is a FINRA guy sending me letters, asking for a statement from me for a preliminary inquiry. Is this just standard procedure or should I be worried? I called the guy and he made it sound like this was all routine but if FINRA tries to make a big deal out of this I might need to get a lawyer.
 
Any thoughts or experience with this?
 Thanks 

Anonymous's picture
Anonymous

If you can't figure out how to use Google, then you don't belong in this business. Go get a job. 

Roxie's picture
Offline
Joined: 2009-10-19

Was a crackdown last year.  Used to be companies only posted for investment related terms and then FINRA upped the ante and wanted all invol terms listed.  You can put a response on your record.  If he just wants a statement, keep it short and sweet and move on.  Happens to alot of folks. 

Anonymous's picture
Anonymous

Does anyone know anything about FINRA Rule 8210?
REPLY: Here is the Rule:

8210. Provision of Information and Testimony and Inspection and Copying of Books

(a) Authority of Adjudicator and FINRA Staff
For the purpose of an investigation, complaint, examination, or proceeding authorized by the FINRA By-Laws or rules, an Adjudicator or FINRA staff shall have the right to:
(1) require a member, person associated with a member, or person subject to FINRA's jurisdiction to provide information orally, in writing, or electronically (if the requested information is, or is required to be, maintained in electronic form) and to testify at a location specified by FINRA staff, under oath or affirmation administered by a court reporter or a notary public if requested, with respect to any matter involved in the investigation, complaint, examination, or proceeding; and
(2) inspect and copy the books, records, and accounts of such member or person with respect to any matter involved in the investigation, complaint, examination, or proceeding.
(b) Other SROs and Regulators
(1) FINRA staff may enter into an agreement with a domestic federal agency, or subdivision thereof, or foreign regulator to share any information in FINRA's possession for any regulatory purpose set forth in such agreement, provided that the agreement must require the other regulator, in accordance with the terms of the agreement, to treat any shared information confidentially and to assert such confidentiality and other applicable privileges in response to any requests for such information from third parties.
Any such agreement with a foreign regulator must also meet the following conditions:
(A) the other regulator party to the agreement must have jurisdiction over common regulatory matters; and
(B) the agreement must require the other regulator to reciprocate and share with FINRA information of regulatory interest or concern to FINRA.
(2) FINRA staff may exercise the authority set forth in paragraph (a) for the purpose of an investigation, complaint, examination, or proceeding conducted by another domestic or foreign self-regulatory organization, association, securities or contract market, or regulator of such markets with which FINRA has entered into an agreement providing for the exchange of information and other forms of material assistance solely for market surveillance, investigative, enforcement, or other regulatory purposes.
(c) Requirement to Comply
No member or person shall fail to provide information or testimony or to permit an inspection and copying of books, records, or accounts pursuant to this Rule.
(d) Notice
A notice under this Rule shall be deemed received by the member or person to whom it is directed by mailing or otherwise transmitting the notice to the last known business address of the member or the last known residential address of the person as reflected in the Central Registration Depository. If the Adjudicator or FINRA staff responsible for mailing or otherwise transmitting the notice to the member or person has actual knowledge that the address in the Central Registration Depository is out of date or inaccurate, then a copy of the notice shall be mailed or otherwise transmitted to:
(1) the last known business address of the member or the last known residential address of the person as reflected in the Central Registration Depository; and
(2) any other more current address of the member or the person known to the Adjudicator or FINRA staff who is responsible for mailing or otherwise transmitting the notice.
(e) Electronic Interface
In carrying out its responsibilities under this Rule, FINRA may, as appropriate, establish programs for the submission of information to FINRA on a regular basis through a direct or indirect electronic interface between FINRA and members.
(f) Inspection and Copying
A witness, upon proper identification, may inspect the official transcript of the witness' own testimony. Upon written request, a person who has submitted documentary evidence or testimony in a FINRA investigation may procure a copy of the person's documentary evidence or the transcript of the person's testimony upon payment of the appropriate fees, except that prior to the issuance of a complaint arising from the investigation, FINRA staff may for good cause deny such request.
I was terminated from my previous firm for what I feel was a pretty minor event. I got my U-5 in the mail and the reason stated was "violation of company policy". My former manager basically admitted after the fact that I got screwed and that HR was looking for any reason to reduce staff. All the U-5 anwsers are “no” since the event was not investment related, there was no complaint and there was no violation of industry rules or regulations.
REPLY: If your U5 reflects a "termination for cause" that suggests a violation of industry rules, FINRA automatically generates an 8210 letter as part of its preliminary investigation.  While the fact that you apparently are not the subject of a consumer-iniated sales-practice violation is a good starting point, there are other situations involving intraindustry misconduct that could still prompt a regulatory investigation and possibly result in the formal filing of charges.  Typically, a mere reduction in force should not have prompted the 8210 letter. As such, there may be other issues at play here -- for example, FINRA is looking at your firm and seeking your responses; the firm has told you one thing but submitted more accusatory information to FINRA, etc.<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
 <?: PREFIX = O />
So now there is a FINRA guy sending me letters, asking for a statement from me for a preliminary inquiry. Is this just standard procedure or should I be worried?
REPLY: While the 8210 letter is often standard procedure, you should always retain a healthy skepticism and be worried. Look at it this way, you were told that you were merely be laid off because of over-staffing. You read the U5 and your interpretation is that it is all "no" answers and the firm allegedly confirmed to you that you did nothing wrong.  However, despite all of that, FINRA is still opening an investigation.  That poses a classic basis to at least be worried.
 
I called the guy and he made it sound like this was all routine but if FINRA tries to make a big deal out of this I might need to get a lawyer.
REPLY: The FINRA staff is not your friend. Ask enough veterans or serious posters on this website and they will likely tell you that FINRA has had a long history of misleading registered reps about the "lack" of seriousness of an investigation, and that you should simply tell the truth and that will quickly resolve the matter. This isn't any time for amateur hour.  Be careful.
 
Any thoughts or experience with this?
 
Thanks 
_popupControl();

Moraen's picture
Offline
Joined: 2009-01-22

LEK - Bill is correct.  FINRA is not your friend.  Don't trust them.  Get some help.  Sounds like you need it.

L_E_K's picture
Offline
Joined: 2010-01-07

Thanks. I sent him a basic response to what happened, nothing omitted or exaggerated, just the facts as I recalled. Hopefully they move on to more important stuff but I am going to maintain a healthy level of skepticism until this is over.  Joel Beck in GA has a great blog that details the process of a FINRA inquiry that gave me an idea of how it should unfold. If it becomes a formal investigation or if I have to give a on-the-record statement then I will definitely get an attorney. Thanks again Bill.  

AAA's picture
AAA
Offline
Joined: 2011-09-15

Hi L_E_K,Just wanted to check what happened with your case, did you hear anything else. I am in similar situation and trying to figure out what to expect.Thanks

stockattorney's picture
Offline
Joined: 2010-09-09

This rule permits FINRA to ask and receive whatever they want.  It's their license to go on a fishing expedition.  The examiner will be all nice and cordial but they won't waste a moment making a disciplinary referral if they detect a violation.  Their policy changed where they review ALL adverse U5 terminations to see if they can find something.  They especially look for "violations of company policy," like yours because it doesn't really say anything about the nature of the termination.  With 8210 they will have already spoken to the firm and will now inquire with you to check and compare your stories and see if they can pursue something.  As a former chief compliance officer of 10 years, I would count the number of days it would take an examiner to send their 8210 when I discharged a rep for cause.  Can you do it alone?  Tread carefully and treat their requests seriously.  Don't deny them or blow them off.  Doing so may very well prompt a bar from the industry.  Consult with an attorney that has experience dealing with FINRA.good luck!  

Please or Register to post comments.

Industry Newsletters
Investment Category Sponsor Links

 

Sponsored Introduction Continue on to (or wait seconds) ×