Securities License and Your Criminal Case
For certain licensed professionals and employees of banks and other FDIC
insured institutions, there are additional collateral consequences that
must be assessed before accepting any plea offer on a New York criminal
case. The Financial Industry Regulatory Authority (FINRA), a private corporation
that regulates securities firms doing business in the United States, licenses
individuals and writes the rules that govern their behavior and compliance
with federal laws. FINRA replaced the National Association of Securities
Dealers (NASD) in 2007 and now regulates over half a million registered
securities representatives.
FINRA has created
Form U4, which is the Uniform Application for Securities Industry Registration
or Transfer, and
must be used by representatives of
broker dealers,
issuers of securities, and
investment advisers to become registered.
As part of this form, certain criminal history disclosure questions are
asked. Rule 3110 (the Supervision Rule) has made background checks more
stringent and increased the verification process regarding information
reported on the U4. Generally, the U4 requires the filer to report criminal
and bankruptcy records, civil litigation, and judgments and liens. FINRA
will compare the information reported against court documents to make
sure brokers are complying with the disclosure rules.
For example, section 14A of the U4 asks:
- Have you ever:
-
Been
convicted of or pled guilty or non contendere ("no contest") in a
domestic, foreign, or military
court to
any felony?
-
Been
charged with
any felony?
Additionally, section 14B of the form asks:
- Have you ever:
-
Been
convicted of or pled guilty or non contendere ("no contest") in a
domestic, foreign, military
court to a
misdemeanor involving investments or an investment-related business or
any fraud, false statements or omissions, wrongful taking of property,
bribery, perjury, forgery, counterfeiting, extortion, or a conspiracy to commit any of these offenses?
-
Been
charged with a
misdemeanor specified in 14B(1)(a)?
As shown,
both arrests and convictions must be disclosed. This is the case for
any felonies and
misdemeanors involving theft or dishonesty. Unfortunately, sometimes licensed professionals, employees of FDIC insured
institutions, and holders of securities licenses get accused of misdemeanor
offenses in New York such as
shoplifting or
theft of services on the New York City subway system. These charges, while they may seem
minor, actually involve elements of dishonesty under the law and can lead to
tragic consequences for these licensed professionals if they are not handled competently.
If you are such an individual who is accused of any criminal charge,
contact us today. The Law Offices of Lance Fletcher can provide you with an assessment
of your case, and possible defenses to your charges.