It can be alarming to receive a Rule 8210 letter. The Financial Industry Regulatory Authority (FINRA) has the ability to impose stiff penalties upon brokers and firms found to be in violation of regulations. And while you shouldn’t ignore the letter, receiving one doesn’t automatically mean you’re in trouble.
What is Rule 8210?
FINRA is not a government agency, but a non-profit organization whose purpose is to deal with licensing and regulation of the industry. It doesn’t have extra-organizational power, but it does have authority over its licensed members and firms. When FINRA feels it needs to investigate possible misconduct, Rule 8210 is the means by which it does so. It permits FINRA to compel information in the absence of subpoena powers.
Why did I receive an 8210 letter?
A Rule 8210 letter is FINRA’s attempt to solicit information in furtherance of an investigation it has either undertaken or is considering undertaking. It’s important to note that an 8210 letter does not automatically mean an investigation has begun, nor does it necessarily mean that you are the target of an investigation. 8210 letters are also sent as a preliminary matter and to those who are not the subject of a potential investigation.
What should I do?
Don’t ignore it. Contact an attorney who is experienced in handling Rule 8210 requests so that you know how best to respond. The penalties for failing to respond can be significant – including being barred from practicing – so it’s critical that your answer to the letter is timely and well-considered.