(a) Notice of Initiation of Summary Proceedings
FINRA's Chief Executive Officer or such other senior officer as the Chief Executive Officer may designate may provide written authorization to FINRA staff to issue on a case-by-case basis a written notice that summarily:
(1) suspends a member, person associated with a member or person subject to FINRA's jurisdiction who has been and is expelled or suspended from any self-regulatory organization or barred or suspended from being associated with a member of any self-regulatory organization;
(2) suspends a member who is in such financial or operating difficulty that FINRA staff determines and so notifies the SEC that the member cannot be permitted to continue to do business as a member with safety to investors, creditors, other members, or FINRA; or
(3) limits or prohibits any person with respect to access to services offered by FINRA if paragraphs (a)(1) or (2) of this Rule or the provisions of Section 15A(h)(3) of the Exchange Act applies to such person or, in the case of a person who is not a member, if FINRA's Chief Executive Officer or such other senior officer as the Chief Executive Officer may designate determines that such person does not meet the qualification requirements or other prerequisites for such access and such person cannot be permitted to continue to have such access with safety to investors, creditors, members, or FINRA, and so notifies the SEC.
(b) Service of Notice
FINRA staff shall serve the member or person subject to a notice issued under this Rule
(or upon counsel representing the member or person, or other person authorized to represent others under Rule 9141, when counsel or other person authorized to represent others under Rule 9141 agrees to accept service for the member or person) by facsimile,
email, overnight courier or personal delivery. Papers served on a member
, person
or counsel for such member or person, or other person authorized to represent others under Rule 9141 by overnight courier or personal delivery shall conform to paragraphs (a)(1) and (3) and
, with respect to a member or person, (b)(1) and (2) of
Rule 9134. Papers served on a member by facsimile shall be sent to the
member's facsimile number listed in the
FINRA Contact System submitted to FINRA pursuant to Article 4, Section III of the FINRA By-Laws, except that, if FINRA staff has actual knowledge that
a member's FINRA Contact System facsimile number is out of date, duplicate copies shall be sent to the
member by overnight courier or personal delivery in conformity with paragraphs (a)(1) and (3) and (b)(2) of
Rule 9134.
Papers served on a member by email shall be sent to the member's email address listed in the FINRA Contact System submitted to FINRA pursuant to Article 4, Section III of the FINRA By-Laws and shall also be served by either overnight courier or personal delivery in conformity with paragraphs (a)(1) and (3) and (b)(2) of Rule 9134. Papers served on a person by facsimile
or email shall be sent to the person's last known facsimile number
or email address and shall also be served by either overnight courier or personal delivery in conformity with paragraphs (a)(1) and (3) and (b)(1) of
Rule 9134. A copy of a notice under this Rule that is served on a person associated with a member also shall be served on such member.
Papers served on counsel for a member or person, or other person authorized to represent others under Rule 9141 by facsimile or email shall be sent to the facsimile number or email address that counsel or other person authorized to represent others under Rule 9141 provides and shall also be served by either overnight courier or personal delivery in conformity with paragraphs (a)(1) and (3) of Rule 9134. Service is complete upon sending the notice by facsimile
or email, sending the notice by overnight courier or delivering it in person, except that, where duplicate service is required, service is complete upon sending the duplicate service.
(c) Contents of Notice
A notice issued under this Rule shall state the specific grounds and include the factual basis for the FINRA action. The notice shall state when the FINRA action will take effect and explain what the respondent must do to avoid such action. The notice shall state that the respondent may file a written request for a hearing with the Office of Hearing Officers pursuant to
Rule 9559. The notice also shall inform the respondent of the applicable deadline for filing a request for a hearing and shall state that a request for a hearing must set forth with specificity any and all defenses to the FINRA action. In addition, the notice shall explain that, pursuant to Rules
8310(a) and
9559(n), a Hearing Officer or, if applicable, Hearing Panel, may approve, modify or withdraw any and all sanctions or limitations imposed by the notice, and may impose any other fitting sanction.
(d) Effective Date of Limitation, Prohibition or Suspension
The limitation, prohibition or suspension referenced in a notice issued and served under this Rule is immediately effective. The limitation, prohibition or suspension specified in the notice shall remain in effect unless, after a timely written request for a hearing and written request for a stay, the Chief Hearing Officer or Hearing Officer assigned to the matter finds good cause exists to stay the limitation, prohibition or suspension.
(e) Request for a Hearing and Stay
A member or person subject to a notice issued under this Rule may file with the Office of Hearing Officers a written request for a hearing pursuant to
Rule 9559. A request for a hearing shall be made within seven days after service of the notice issued under this Rule. A request for a hearing must set forth with specificity any and all defenses to the FINRA action.
A member or person subject to a notice issued under this Rule may, concurrent with or after filing a request for a hearing, file with the Office of Hearing Officers a written request for a stay of the limitation, prohibition or suspension specified in the notice. A request for a stay must set forth with specificity any and all relevant facts and arguments supporting the request for a stay.
(f) Failure to Request Hearing
If a member or person subject to a notice issued under this Rule does not timely request a hearing within the time period specified in paragraph (e) of this Rule, the notice shall constitute final FINRA action.
(g) Request for Termination of the Limitation, Prohibition or Suspension
A member or person subject to a limitation, prohibition or suspension under this Rule may file a written request for termination of the limitation, prohibition or suspension on the ground of full compliance with the notice or decision. Such request shall be filed with the head of the FINRA department or office that issued the notice or, if another FINRA department or office is named as the party handling the matter on behalf of the issuing department or office, with the head of the FINRA department or office that is so designated. The appropriate head of the department or office may grant relief for good cause shown.
