Frequently Asked Questions for Respondents in FINRA Disciplinary Proceedings

FINRA is committed to ensuring that all respondents are treated fairly in the disciplinary process. Below, you will find brief answers to a number of questions frequently asked by respondents. We hope these answers will be helpful in orienting you to the disciplinary process.

FINRA's disciplinary proceedings are governed by the FINRA Code of Procedure (the Code). You should consult the Code to obtain a complete picture of your rights and responsibilities in the disciplinary process. In addition, FINRA's Office of Hearing Officers has prepared a Guide to the Disciplinary Hearing Process (the Guide), which gives a description of the disciplinary process. FINRA's rules, including the Code, are available at www.finra.org/rules. The Guide is available at www.finra.org/oho.

I have received a Complaint in which the Department of Enforcement charges me with violating FINRA rules or securities laws. How can I respond?: You may respond by sending an Answer to the Complaint to FINRA’s Office of Hearing Officers and the Department of Enforcement. The Office of Hearing Officers has included a sample Answer as one of the sample forms on its web page. You may file your Answer as a PDF and email it to the Office of Hearing Officers at [email protected]. You must also send a copy of your Answer to the Enforcement attorney whose name, email address, mailing address, and telephone number are listed in the Notice of Complaint. For more information, read the Code, including Rules 9133–9138 and 9215.
What must I include in my Answer?: You must respond to each allegation in the numbered paragraphs of the Complaint. The numbered paragraphs of your Answer should correspond to the numbered paragraphs of the Complaint. A general denial of all allegations is not sufficient. Your Answer must admit or deny each allegation separately, but you can admit some parts of a paragraph and deny others. If you do not have enough information to enable you to admit or deny an allegation, say so, and it will be treated as a denial. You (or your attorney, if you have one) must sign the Answer, and the Answer must include your (or your attorney’s) address, telephone number, and email address. For more information, read the Code, including Rule 9215, and review the Sample Answer.
How long do I have to file an Answer to the Complaint?: The deadline for responding to the Complaint is 25 calendar days after it is served on you. This date is stated in the Notice of Complaint. If you have questions about the procedures or deadline for filing, call the Office of Hearing Officers at (202) 728-8008 and ask to speak to the Case Administrator assigned to your case. For more information, read the Code, including Rule 9215.
What happens if I do not file an Answer?: If you do not file an Answer by the deadline in the Notice of Complaint, Enforcement will send you a Second Notice of Complaint. If you do not file an Answer by the deadline in the Second Notice, the Hearing Officer may issue a default decision against you. In a default decision, the Hearing Officer may deem the allegations in the Complaint admitted by you, and may make findings that you engaged in the alleged misconduct, and violated FINRA rules or the federal securities laws. As a result, you could be fined, suspended from working with a member firm for a specified time, or permanently barred from working with a member firm. For more information, read the Code, including Rules 9215(f) and 9269.
What do I do if I lack access to the necessary technology to file and serve papers electronically?: You may ask the Office of Hearing Officers for an accommodation. FINRA’s Procedural Rules require that you file all papers with the Office of Hearing Officers by email and provide other parties with copies of all papers by email, unless the assigned Hearing Officer orders otherwise. If you lack access to the necessary technology to file, serve, and receive papers by email, you may file a motion seeking an accommodation. Your motion must explain the reason for your request and suggest an alternate form of service. You must file the motion by Express Mail or delivery service to the Office of Hearing Officers, 1700 K Street, NW, Washington, DC 20006.
How do I get a hearing on the charges in the Complaint?: In your Answer just state, "I request a hearing." For more information, read the Code, including Rule 9221 and see the Sample Answer.
If I ask for a hearing, who will hear my case?: Your case will be heard by a three-person Hearing Panel. The Chief Hearing Officer will appoint a Hearing Officer who chairs the Panel. The Chief Hearing Officer also appoints two industry panelists, drawn primarily from a pool of current and former securities industry members of FINRA's Regional and Board Advisory Committees, as well as former members of FINRA's National Adjudicatory Council, and former FINRA Governors. The two industry representatives must be associated with, or retired from association with, a FINRA member firm. When selecting industry panelists, the Chief Hearing Officer considers the following factors: (1) expertise; (2) the absence of any conflict of interest or bias, and any appearance thereof; (3) availability; and (4) the frequency with which a person has served as a panelist on a Hearing Panel during the past two years. For more information, read the Code, including Rules 9231-9234.
Does the Office of Hearing Officer's check Hearing Panelists for conflicts?: Yes. Before the Chief Hearing Officer assigns a Hearing Officer or appoints an industry panelist to serve on a Hearing Panel, the Office of Hearing Officers evaluates each candidate to ensure that he or she is free of conflicts of interest and that no circumstances exist where the candidate's fairness might reasonably be questioned. Following appointment, if a Hearing Officer or panelist learns of a conflict of interest or other circumstance in which his or her fairness might reasonably be questioned, he or she must inform the Chief Hearing Officer and withdraw from the matter.
Who is the Hearing Officer and what is his or her role in the proceeding?: Hearing Officers are attorneys employed by FINRA and in the Office of Hearing Officers, which reports to FINRA’s Chief Executive Officer. The only function of the Office of Hearing Officers is to serve as an adjudicator; it is entirely independent of the Department of Enforcement and other Regulatory Operations departments. When the Department of Enforcement files a Complaint, the Chief Hearing Officer assigns a Hearing Officer to the case. Hearing Officers are assigned to cases in rotation so far as practical, generally employing the same standard set forth for the appointment of administrative judges. The Hearing Officer is responsible for overseeing the proceeding to ensure that it is conducted in a fair, impartial, and efficient manner, much as a judge oversees cases in a court. The Hearing Officer has authority to make all rulings about the schedule, the procedures to be followed, and what evidence will be admitted. The Hearing Officer also serves as Chair of the Hearing Panel. For more information, read the Code, including Rule 9235.
What happens if I file an Answer but do not ask for a hearing?: If you file an Answer and do not request a hearing, a Hearing Panel will decide your case. based on the filings. The Hearing Panel will give you and Enforcement an opportunity to submit evidence and written arguments. The Hearing Panel can decide the case on the written submissions, or it can order an in-person hearing if it determines that a hearing is necessary. For more information, read the Code, including Rule 9221.
Do I have a right to be represented by a lawyer? Can I be represented by someone who is not a lawyer, but is familiar with FINRA procedures?: Individual respondents have the right to represent themselves, or be represented by a lawyer. Respondents that are a corporation, trust, or association may be represented by one of its officers, and a partnership may be represented by one of the partners. For more information, read the Code, including Rule 9141.
If I want a hearing, is the process complicated?: A critical first step on the road to a hearing is the “pre-hearing conference,” which the Hearing Officer will schedule shortly after you file your Answer. The conference is usually held by telephone or video conference, and both you (or your lawyer, if you have one) and Enforcement must participate in the conference. If you fail to appear by telephone or video conference for a pre-hearing conference, you may be held in default. Accordingly, if you are unavailable for the scheduled conference, call the Office of Hearing Officers at (202) 728-8008 and discuss it with the Case Administrator assigned to your case. During the conference, the Hearing Officer will ask all parties to discuss the case, and the Hearing Officer will try to answer any questions you have. Based on the specific circumstances of your case, as discussed during the conference, the Hearing Officer will establish a hearing date and a pre-hearing schedule. Shortly after the conference, the Hearing Officer will issue a document called a Case Management and Scheduling Order. This Order sets forth the entire pre-hearing schedule and very detailed instructions for filing requirements and procedures. It also includes guidance on how to protect Personal Confidential Information (PCI) and Personal Sensitive Information (PSI). See Sample Disciplinary Case Management and Scheduling Order and Sample PCI and PSI Protective Order.; If you (or your attorney) want to offer witness testimony or documents (referred to as “exhibits”), as proposed evidence, you must provide a list of your witnesses and exhibits, and copies of your exhibits, to the Office of Hearing Officers and Enforcement by the deadline set in the Case Management and Scheduling Order. Enforcement is required to provide its witness and exhibit lists and copies of its proposed exhibits to you and the Office of Hearing Officers at that same time.; You must appear for the hearing at the scheduled date and time. If you fail to appear, you may be held in default. For more information, read the Code, including Rules 9241, 9242, and 9269.
What additional rights do I have?: You have a number of rights under the Code. Most importantly, Enforcement must make available to you for inspection and copying (at your expense) certain documents prepared or obtained by FINRA staff in connection with the investigation that led to the proceedings against you. This includes FINRA requests for information sent to persons who are not employed by FINRA; any documents provided in response to those requests; any transcripts of testimony taken during the investigation, as well as exhibits to the transcripts; any other documents obtained from persons not employed by FINRA; and any exculpatory evidence. Under certain circumstances, you may have the right to compel certain witnesses to testify at the hearing and produce documents. There are several categories of documents, however, that Enforcement does not have to produce. To be aware of all your rights under the Code, and the limitations on those rights, you should read the Code carefully, including Rules 9251-9253.
Are mediation services available? Can I request that a mediator be appointed for the purposes of settlement discussions?: The Office of Hearing Officers offers mediation services. The Chief Hearing Officer can appoint a mediator at the parties’ request. The mediator conducts and facilitates settlement discussions. All communications in a mediation are confidential. The mediator will not disclose any details of the settlement discussions with the assigned Hearing Officer or the Hearing Panelists. For more information, see the Office of Hearing Officer’s Mediation Guide. If both parties are interested in this service, call the Office of Hearing Officers at (202) 728-8008 and ask to speak to the Case Administrator assigned to your case.
What happens at the hearing?: FINRA hearings are less formal than court proceedings, but the hearing process is similar. The parties are allowed to make “opening statements” to the Panel. Because Enforcement has the burden of proving the allegations in the Complaint, it goes first. Enforcement offers its evidence, which may include the testimony of witnesses and exhibits. You will have an opportunity to question every witness Enforcement offers and raise objections to Enforcement witness testimony and proposed exhibits. The members of the Panel can also ask questions. When Enforcement has finished presenting its evidence, you may testify yourself, call your own witnesses to testify, and offer your own exhibits. Enforcement may question your witnesses or object to your exhibits, and the Panel may also ask questions. of you and your witnesses. When the parties have finished offering evidence, they are allowed to offer “closing statements” to the Panel. For more information, read the Code, including Rules 9261–9267.
What happens after the hearing?: After the hearing, the Hearing Officer usually orders the parties to file proposed findings of fact, conclusions of law, and post-hearing briefs. Post-hearing briefing generally is completed approximately 60 days after the close of the hearing. After receipt and review of such post-hearing submissions, if any, the Panel discusses the evidence and reaches a decision. This process is called “the Hearing Panel deliberation” and generally occurs within 30 days of receipt of post-hearing briefs. Each member of the Panel has one vote, and if there is a disagreement, a majority vote determines the outcome. The Hearing Officer prepares a written decision setting forth the Panel’s decision and explaining the Panel’s reasons. The Office of Hearing Officers serves the decision on all the parties. If any member of the Panel disagrees with the majority’s decision, he or she may prepare a written dissent, which is issued with the decision. Any party may appeal the Hearing Panel’s decision to FINRA’s National Adjudicatory Council within 25 days after service of the decision, or the National Adjudicatory Council can call the decision for review. For more information, read the Code, including Rules 9268, 9311, and 9312.
When can I expect to receive a written decision from the Hearing Panel?: FINRA Rule 9268(a) states that, within 60 days of a date established by the Chief Hearing Officer, the Hearing Officer shall prepare a written decision. The Chief Hearing Officer generally requires the Office of Hearing Officers to calculate the 60-day preparation time from the date the Hearing Panel completes its deliberations and considers the decision “prepared” by the Hearing Officer if the Hearing Officer submits it for final editing within that 60-day period. Occasionally, the Chief Hearing Officer is asked to grant a short extension. Accordingly, in most cases, the Office of Hearing Officers issues a written decision four to six months after the conclusion of the hearing.
Where can I get additional information about the disciplinary process?: As explained above, you should read the Code and the Guide carefully for detailed answers to all your questions. You may also call the Office of Hearing Officers at (202) 728-8008 and ask to speak to the Case Administrator assigned to your case. The Case Administrator cannot give you legal advice, but can tell you the status of your case and assist you with procedural questions.
Where can I find Hearing Officer Orders and Hearing Panel Decisions in prior FINRA disciplinary matters?: Significant Hearing Officer Orders are available on our website, www.finra.org/oho. Hearing Panel Decisions are available on www.finra.org/oho, and on LEXIS.