New York Securities Fraud Lawyers Blog
Earlier this week at Malecki Law, owner Jenice Malecki was quoted in a Financial Advisor IQ article, titled, “Settled at Your Peril? Past Arbitration Outcomes Factoring into Finra Sanctions.”
The article discusses FINRA’s revised sanction guidelines in May 2018. The revision took an expansive approach to reviewing a broker’s past when deciding on their sanctions. Specifically, the revised sanctions guidelines indicated that adjudicators could also look to a broker’s past awards and settlements, outside of their own disciplinary history, in determining their sanctions. If you are a broker who feels like you have been unfairly sanctioned by FINRA, you need to reach out to a Regulatory Defense law firm in New York, like Malecki Law, for a free consultation.
A potentially controversial aspect of the sanctions guidelines is that not only can the broker’s historic arbitrations be considered, but arbitrations where they were not a named party but simply the subject of the claim, can be considered. This can be problematic as the investor Claimant made a choice to name the brokerage firm as Respondent and not the broker, sometimes, in making this decision, the investor may be attempting to avoid future consequences for the broker. However, unfortunately, the broker may still face consequences by virtue of being mentioned in the Statement of Claim. Are you a registered representative facing sanctions? You should consult a Regulatory Defense attorney, like the attorneys at Malecki Law in New York.
In the article, Ms. Malecki indicated that just as financial professionals are required to follow the high standards of commercial honor under FINRA Rule 2010, FINRA personnel must comply with the standard as well. Ms. Malecki further indicated that accounting for a broker’s perspective on their history of settled arbitrations should be part of the equation before determining the broker’s sanctions. She explains that without accounting for the broker’s perspective, it does not seem to be in “good faith or fair dealing” under Rule 2010 to unilaterally sanction a broker without giving the broker a chance to explain their side of the story. Brokers that have been sanctioned due to their past settled arbitrations may have been wrongfully sanctioned. If this sounds like your situation, you need to speak with a Regulatory Defense lawyer in New York, like the lawyers at Malecki Law.
Later in the article, Ms. Malecki explains that although it may be fair to consider a broker’s arbitration history, then that fairness would need to be accompanied by the broker’s perspective.
The article further explains that if a broker believes their arbitration history is being unfairly interpreted, the broker can then reject the terms included in the consent offer and continue to fight at a hearing.
This topic is in line with Malecki Law’s previously posted blogs about how the securities industry has become a “one strike and you are out” industry. See Malecki Law Obtains Second Favorable Industry Expungement Award In As Many Months and Defamatory Form U5 Language Deters Investment Firms from Hiring Registered Representatives – Malecki Law Obtained a Favorable Award. Both of the foregoing articles discuss Malecki Law’s recent wins in getting their registered representative clients’ Forms U5 language expunged due to defamatory language that can be publicly seen on their BrokerCheck reports. Brokerage firms publicly posting termination reasons containing false information has the power to excommunicate the broker from the sole industry they devoted their life to. If you feel like you have fallen victim to the “one strike and you are out” mantra in the securities industry, you should talk to a Regulatory Defense law firm, like Malecki Law in New York, to review your situation and discuss your options.