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NYC Criminal Defense Attorney

Collateral consequences


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:

  1. 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:

  1. 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.