June 15, 2024

Securities Employee Regulatory Representation

FINRA Attorneys and SEC Attorneys


Securities Employee Regulatory Representation and Wells Notice Representation – SEC, FINRA, STATE Investigations

Often times a registered representative / stock broker may be the subject of a regulatory investigation requiring representation with respect to depositions, subpoena responses, record requests or Wells Notices. Either FINRA, the SEC, CFTC or other state or federal regulatory body may request their presence or production of documents in relation to an investigation. The Meissner firm has significant experience dealing with such representation which often involves focusing on the employee’s best interest, rather than their employer brokerage firm.

Many brokerage employees do not realize that often times conflicts arise within such investigations and that an attorney who is being paid directly by the brokerage firm so as to represent the employee during such investigation likely may have a conflict which should at a minimum be fully disclosed and possibly should cause the attorney to withdraw from such representation. Unfortunately, not all FINRA attorneys do so, as they are focusing on the best interest of the brokerage firm rather than the employee. An employee who ignores such potential conflicts simply because the firm is paying for such representation is likely doing more harm than good for their own interests and in the long run will cost the employee significantly more than any retention of private attorney, in the form of attempting to reverse any damage done by an attorney who did not have that employee’s best interest as their focus.

Ideally if an employer is willing to pay for legal representation, an employee should insist that the employee select who the FINRA attorney will be, that the employee is the party who signs the retainer agreement with the attorney and it is the employee who in fact pays the attorney, while at the same time the employer may separate and apart from the retainer agree to reimburse the employee for such legal expenses. Such arrangement, maintains the relationship solely between the attorney and the employee, as the attorney is not being paid by the brokerage firm and the brokerage firm did not locate nor retain the attorney. The Meissner firm has been engaged in such fashion and has found such arrangement to be in the best interest of all employees who require legal representation.

A recent example of the firm’s record of success was in 2009 when the FINRA and SEC attorneys of the firm represented a large producer within a major wall street investment bank who was the subject of regulatory inquires by the Financial Industry Regulatory Authority (FINRA), enforcement arm. After being retained directly by the employee the FINRA attorneys of the Meissner firm represented the employee in several on the record depositions before FINRA regarding customer sales practice issues /complaints. The firm also responded to several document requests from FINRA regarding the same issues. FINRA then issued what is known as a “Well Notice” to the client on June 11, 2009. The Wells Notice stated that FINRA had made a preliminary determination to take disciplinary action against our client. The Wells Notice raised several concerns related to FINRA Conduct Rule 2310 (Suitability) and FINRA Conduct Rule 2110 (A catch all provision asserting a violation of the Standards of Commercial Honor and Principles of Trade) involving Unit Investment Trusts, mutual funds, and other securities. After thorough research, both with respect to legal issues involved, the evidence presented, as well as a review of years of prior enforcement proceedings, the Meissner firm drafted and submitted on July 22, 2009 a detailed twenty page Wells submission opposing the recommendation of disciplinary action against its client. The first page of such Opposition submission can be seen here. On September 9, 2009, after having reviewed our submission, we were notified by FINRA that it had decided to reverse course and Not recommend the commencement of disciplinary action against our clientwhich letter can be seen here – Sept 9, 2009 FINRA Letter Reversing its Prior Wells Notice Decision. . Most securities practitioners know that it is rare for any regulatory body to reverse course in response to a Wells Notice submission of counsel and both we and our client were very pleased with the results of our hard work in assisting our client in avoiding any unwarranted disciplinary action. Such is just one example of the firm’s careful tailored attention and hard work paying off for its clients.

 The Meissner firm’s regulatory experience, having been a securities regulator for many years, assists us in our ability to convince regulators, where appropriate, not to take disciplinary action and if any such action is warranted that it be appropriate and not excessive in relation to the facts.

Also please visit our entirely FINRA Attorney web site expanding on FINRA related claims and  law.

*Prior results cannot and do not guarantee or predict a similar outcome in a future matter.