Financial fraud is taken very seriously by regulatory authorities, including the Financial Industry Regulatory Authority (FIRNA). FIRNA has the ability to compel you to provide testimony or produce documents related to a financial fraud investigation.
What is an 8210 letter?
If you are being investigated by FIRNA over accusations of financial fraud, you may have received an “8210 letter.” These letters are based on FIRNA Rule 8210 and they require you to testify or produce documents with regards to a FIRNA investigation. FIRNA is not a government entity, and so cannot issue subpoenas. Instead, it issues Rule 8210 letters.
What if you do not comply with an 8210 letter?
If you do not comply with an 8210 letter you could incur steep fines. It could even spell out the end of your career as a whole. In fact, over the past two years over 730 brokers were disbarred. One-third of these disbarments were for failure to comply with an 8210 letter. Failure to comply with an 8210 request can lead to suspicion of fraud or other egregious actions.
Even if you do not comply with an 8210 letter, FIRNA’s role in the investigation is not done. FIRNA will continue to investigate to ensure there are not additional complicit parties. FIRNA will also work to make harmed customers whole again. Finally, FIRNA will refer matters that are outside their jurisdiction to the appropriate government regulators and to law enforcement if necessary.
For all these reasons, you will want to carefully consider your options when presented with an 8210 letter. Even if you feel the letter is not warranted and you have done nothing wrong, the failure to comply can have consequences that can affect your entire career and your future as a whole.