Internal Investigations at a Brokerage or Investment Advisory Firm

Brokerage or Investment Advisory Firms are required by FINRA to implement certain policies and procedures within their firm to ensure that their brokers or advisors are following all relevant securities laws. Supervisors and compliance officers are typically responsible for implementing the policies and procedures and will also conduct investigations when it seems that securities laws have been broken at a firm.

Within the policies and procedures that firms implement are systems for detecting “red-flags,” or indications that a broker or advisor may be violating securities laws in their relationships with customers. When red-flags are detected, supervisors and compliance officers at a firm are required to conduct investigations into the conduct that occurred and, depending on the severity of the conduct, levy disciplinary actions against the violative broker or advisor. Internal investigations also arise from complains by customers and/or other industry members, as well as whistleblowers.

If your firm has opened an internal investigation into your conduct, there are several things that can happen both at the onset of the investigation as well as at its completion. At the onset of an investigation, you may be put on administrative leave or taken off certain accounts within the firm until the investigation is complete. Once the investigation finishes, you maybe be able to return to work as normal, return to work under heightened supervision, or your employment with the firm may be terminated.

As soon as you learn that your firm is investigating your conduct, it is prudent to speak with an attorney who is experienced in securities industry matters, like the ones at Malecki Law. Having a securities attorney in your corner during an internal investigation can help facilitate positive outcomes with your firm. Lawyers can work with you behind the scenes, making sure written responses are stated in the most favorable light, as well as prepare you for interviews by compliance and/or the firm’s lawyers – who will be representing the firm, not you.