How Long Do FINRA and SEC Investigations Typically Last? - Transcript

When facing a FINRA or SEC investigation, one of the most common concerns is its duration. These investigations are known for their lengthy timelines, often stretching into years. At Malecki Law, we understand the frustration this can cause and work diligently to navigate these complex processes on behalf of our clients.

FINRA and SEC investigations involve stringent administrative processes and multiple layers of review. This thoroughness is intended to ensure fair and just outcomes, but it often leads to delays. The process typically includes:

• Initial Investigation by Staff: The case begins with staff members collecting evidence and conducting interviews. Once they believe there may be a violation, the case is escalated.
• Managerial Review: The collected evidence is reviewed by managers, who determine whether further action is warranted.
• Regional Oversight: The case is sent to a regional manager for additional review and recommendations.
• Central Committee Decision: For SEC cases, a committee in Washington, D.C., makes the final decision on whether to pursue the matter. This step may involve changes or additional considerations, which are then communicated back to the regional office.

This iterative process is designed to be thorough but can result in significant delays. Both FINRA and the SEC also face challenges such as understaffing, which further prolongs investigations.

For individuals and firms under investigation, the prolonged timeline can feel like an unending burden. The uncertainty often impacts mental well-being and professional stability. During this time, those being investigated may face questions from clients, colleagues, and even media outlets. Additionally, ongoing investigations may limit opportunities for growth or partnerships within the securities industry.

It is important to approach these challenges with patience and preparation. Knowing the likely stages and delays ahead can help manage expectations and allow for strategic planning.

Adding to the timeline is the fact that FINRA, the SEC, and state regulators often have parallel jurisdiction over cases. This means multiple entities may investigate the same matter simultaneously, increasing the complexity and length of the process. Each agency follows its own procedures and timelines, which can create additional delays.

For example, a state securities division may pursue a related but distinct investigation alongside FINRA or the SEC. This can lead to conflicting demands for documentation, witness testimony, and/or procedural filings. While these overlapping jurisdictions aim to enforce securities laws comprehensively, they often increase the burden on those being investigated.

While the timeline of an investigation is largely dictated by the regulatory agencies, there are steps you can take to protect yourself and streamline the process:

• Maintain Accurate Records: Ensure that all financial and communication records are organized and readily accessible. Regulators will request extensive documentation, and delays in providing these can prolong the investigation.
• Communicate Clearly: Work with your legal team to ensure that all responses to inquiries are accurate, concise, and timely.
• Seek Professional Guidance: Engaging experienced legal counsel early can help navigate the complexities of regulatory investigations and minimize unnecessary delays.

Proactively managing your role in the investigation can mitigate some of the stress associated with prolonged timelines and ensure that your rights are protected throughout the process. If you are expecting, or currently under a securities law investigation, you should promptly reach out to securities law experts, like the attorneys at Malecki Law in New York.

For individuals and firms under investigation, these delays can feel like justice denied. Ongoing investigations can create uncertainty, reputational harm, and financial strain. Many clients express a desire to resolve matters quickly, but the procedural requirements of these agencies leave little room for expedited resolutions.

At Malecki Law, we work to move investigations along as efficiently as possible, advocating for our clients at every stage. While we cannot eliminate the procedural hurdles, we aim to minimize the disruption and stress caused by prolonged investigations, and work with the appropriate regulatory agency to achieve the most efficient outcome possible.

Navigating a FINRA or SEC investigation requires patience, knowledge, and strategic planning. At Malecki Law, we provide comprehensive support to help clients manage the challenges of these investigations, including:

• Proactive Communication: Keeping clients informed about the progress of their case and the expected timeline.
• Strategic Advocacy: Engaging with investigators to address concerns and advocate for efficient resolutions.
• Reputation Management: Helping mitigate the reputational harm that can arise during prolonged investigations.
• Tailored Case Strategies: Every investigation is unique, and we develop strategies designed to address the specific issues in your case while working toward an optimal resolution.

If you’re facing a FINRA or SEC investigation, contact Malecki Law at (212) 943-1233 or reach out online for a consultation. We are committed to protecting your rights and guiding you through even the most complex regulatory challenges.

Transcript:

Investigations as well as state and investigation because State they all three have parallel jurisdiction over you tend to go on for a very long time so many clients I’ve represented can’t we just settle this can’t we just do this I mean why does this have to drag on for years but they have very stringent administrative processes it goes from the staff that’s investigating up to the manager and then the manager has to say yes I think we should pursue this and it goes to the regional manager then from the regional manager it goes all the way up to this Committee in DC that has to say yes or no we’ll pursue this and then it comes all the way back down sometimes with changes this process goes on for years and many people can’t believe they can’t get out of it sooner and they really want to and I sympathize with them it’s like justice delayed is Justice denied but you know we do try to move them along as quickly as possible but they’re all understaffed and have very stringent procedures internally that you know unfortunately cause these investigations to go on for for too long.