Did you get an 8210 letter? It means the Financial Industry Regulatory Authority (FINRA) has started an investigation against you or your firm. As per the rules, regulators can investigate any financial agency and members to ensure they adhere to commercial standards and trade principles. If you receive this letter, you have to consult your attorney to understand what FINRA wants.
The letter indicates that they wish to access particular books or information. The reason for receiving such a letter can be a complaint, referral, a tip, etc. No matter what it is, you should be ready as you are on the radar. You wouldn’t get a subpoena as it doesn’t have that authority. Hence, 8210 Letter is the only means.
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Responding to 8210 Letter
Since it can cost your business or career as a financial advisor, you must get in touch with a FINRA arbitration attorney. They can guide you end-to-end about this process because of their experience, knowledge, and expertise. For example, FINRA rules may require you to share certain documents. Your attorney can tell you what you have to send them and how.
There will be a due date in the letter within which you have to arrange and dispatch all the details. Or, if you need some more time for data collection, you can seek an extension. Permission can come through only if your request for an extension is legitimate. In this case, too, your lawyer can guide you best.
The documents should be well-organized and accurate. Also, when you respond to them, your communication should be crisp and responsive. It would help if you were thorough with your answers to their interrogatories. Also, the necessary details that you share should align with the interrogatory properly. Sensitive information should reach them through encrypted file attachments via email or overnight mail delivery system.
Remember, continually failing to respond to the letter may cause a permanent ban on your membership in the industry. That’s why it is crucial to remove all the scope of errors by seeking guidance from an expert lawyer.
Points to consider
As soon as you receive FINRA 8210 Letter, you must contact your arbitration attorney for discussions. You have to understand from them what led to such an event and how to tackle it. Knowing the possible consequences is also critical. Sometimes, you don’t have to guess the reason. For example, it can be due to incomplete details in Form U-4, lien, a customer complaint about a transaction, etc.
Essentially, you cannot take this communication lightly. However, you don’t have to change Form U-4 either unless specifically mentioned. If you have to disclose the form, you must first speak to the compliance department.
When they investigate, you may have to sit through an On the Record Interview in the presence of your attorney. Although having an attorney at that time may not be mandatory, you can still ask yours to join the process. Usually, these sessions last a few hours. But some cases can take several days.
Since it can be a daunting experience, you need to prepare well for it by getting the best lawyer.