9285. Interim Orders and Mandatory Heightened Supervision While on Appeal or on Discretionary Review

Unless otherwise ordered by a Hearing Officer, within 10 days after service of a notice of appeal from, or the notice of a call for review of, a decision issued pursuant to Rule 9268 or Rule 9269 in which the Hearing Panel or, if applicable, the Extended Hearing Panel or the Hearing Officer finds that a Respondent violated a statute or rule provision, the Department of Enforcement may file a motion for the imposition of conditions or restrictions on the activities of a Respondent that are reasonably necessary for the purpose of preventing customer harm. Notwithstanding the appeal or call for review, the Hearing Officer that participated in the underlying disciplinary proceeding shall have jurisdiction to rule upon a motion for the imposition of conditions or restrictions.

A motion for the imposition of conditions or restrictions shall be filed with FINRA's Office of Hearing Officers and shall be served simultaneously on FINRA's Office of General Counsel and all other parties to the disciplinary proceeding. The motion shall specify the conditions or restrictions that are sought to be imposed and explain why the conditions or restrictions are reasonably necessary for the purpose of preventing customer harm.

Any Respondent may file an opposition or other response to a motion for the imposition of conditions or restrictions within 10 days after service of the motion, unless otherwise ordered by the Hearing Officer. The opposition or other response shall explain why no conditions or restrictions should be imposed or specify alternate conditions or restrictions that are sought to be imposed and explain why the conditions or restrictions are reasonably necessary for the purpose of preventing customer harm.

The Department of Enforcement shall have no right to reply to the opposition or other response of a Respondent unless the Hearing Officer permits a reply to be filed. Unless otherwise ordered by the Hearing Officer, the Department of Enforcement’s reply submission shall be filed within three days after the Hearing Officer serves the order granting the motion to file a reply or a Respondent serves the opposition or other response to which the Hearing Officer previously ordered that a reply could be filed.

A motion for conditions or restrictions shall be decided by the Hearing Officer that participated in the underlying disciplinary proceeding. Unless ordered otherwise by the Hearing Officer, the motion for conditions or restrictions shall be decided based on the moving and opposition papers and without oral argument. The Hearing Officer shall have the authority to impose any conditions or restrictions that the Hearing Officer considers reasonably necessary for the purpose of preventing customer harm. The Hearing Officer shall issue a written order ruling upon a motion for conditions or restrictions in an expeditious manner and no later than 20 days after any opposition or other response filed pursuant to paragraph (a)(3) or any reply filed that the Hearing Officer permits pursuant to paragraph (a)(4) of this Rule, and serve the order on all parties. The Office of Hearing Officers shall provide a copy of the order to each FINRA member with which the Respondent is associated.

A Respondent subject to a Hearing Officer's order imposing conditions or restrictions may file, within 10 days after service of the order imposing conditions or restrictions, a motion with the Review Subcommittee to modify or remove any or all of the conditions or restrictions.

The Respondent has the burden to show that the conditions or restrictions imposed are not reasonably necessary for the purpose of preventing customer harm. The Respondent's motion to modify or remove conditions or restrictions shall be filed with FINRA's Office of General Counsel and shall be served simultaneously on the Office of Hearing Officers and all other parties to the disciplinary proceeding.

Unless otherwise ordered by the Review Subcommittee, the Department of Enforcement shall have five days from service of Respondent's motion to file an opposition or other response to the motion.

The Respondent may not file a reply to the opposition.

Unless ordered otherwise by the Review Subcommittee, the motion to modify or remove conditions or restrictions shall be decided based on the moving and opposition papers and without oral argument. The Review Subcommittee shall issue a written order ruling upon a motion to modify or remove conditions or restrictions in an expeditious manner and no later than 30 days after any opposition filed pursuant to paragraph (b)(3) of this Rule, and serve the order on all parties. The Review Subcommittee may approve, modify or remove any and all of the conditions or restrictions. The Office of General Counsel shall provide a copy of the order to each FINRA member with which the Respondent is associated.

The filing with the Review Subcommittee of a motion to modify or remove conditions or restrictions shall stay the effectiveness of the conditions or restrictions ordered by a Hearing Officer until the Review Subcommittee rules on the motion.

Except as otherwise provided in this Rule, all motions, oppositions, responses and replies pursuant to this Rule shall comply with Rule 9146.

Conditions or restrictions imposed by a Hearing Officer that are not subject to any stay, or imposed by the Review Subcommittee, shall remain effective until FINRA's final decision in the underlying disciplinary proceeding takes effect.

When a Hearing Panel, Extended Hearing Panel or Hearing Officer issues a decision pursuant to Rule 9268 or Rule 9269, in which the adjudicator finds that a Respondent violated a statute or rule provision, any member firm with which the Respondent is associated must adopt a written plan of heightened supervision of the Respondent if any party appeals the decision to the National Adjudicatory Council, or if the decision is called for review pursuant to Rule 9312. The member must file the written plan of heightened supervision with FINRA’s Office of General Counsel and shall serve a copy on the Department of Enforcement and the Respondent, within 10 days of any party filing an appeal or the case being called for review. If the Respondent becomes associated with another member during the appeal of the decision of the Hearing Panel, Extended Hearing Panel or Hearing Officer, or review by the National Adjudicatory Council, that member, within 10 days of the Respondent becoming associated with the member, shall file a plan of heightened supervision with FINRA's Office of General Counsel and shall serve a copy on the Department of Enforcement and the Respondent. Any member that has adopted a written plan of heightened supervision for a Respondent pursuant to this paragraph (e) shall file and serve an amended written plan of heightened supervision that takes into account any conditions or restrictions imposed pursuant to Rule 9285, within 10 days of conditions or restrictions becoming effective.

The plan of heightened supervision, and any amended plan, shall comply with Rule 3110, and shall be reasonably designed and tailored to include specific supervisory policies and procedures that address the violations found by the Hearing Panel, Extended Hearing Panel or Hearing Officer and shall be reasonably designed to prevent or detect a reoccurrence of those violations. The plan of heightened supervision, and any amended plan, shall, at a minimum, include the designation of an appropriately registered principal who is responsible for carrying out the plan of heightened supervision, and take into account any conditions and restrictions imposed by the Hearing Officer or Review Subcommittee pursuant to paragraph (a) or (b) of this Rule.

The plan of heightened supervision, and any amended plan, shall be signed by the designated principal, and shall include an acknowledgement that the principal is responsible for implementing and maintaining the plan of heightened supervision.

The plan of heightened supervision, and any amended plan, shall remain in place until FINRA's final decision takes effect.