Guide to the Disciplinary Hearing Process
This Guide summarizes some of the rules in the Rule 9100 and Rule 9200 Series of FINRA’s Code of Procedure (Code). FINRA’s Code, which the Securities and Exchange Commission has approved, contains the rules that govern the disciplinary process. Any person named as a Respondent in a FINRA disciplinary proceeding is entitled to request a hearing. The Code ensures that hearings are conducted in a fair manner, Hearing Panels act impartially and objectively, and cases are concluded as expeditiously as possible. The Code is available on FINRA’s website.
The purpose of this Guide is to assist the reader in understanding FINRA’s disciplinary hearing process. This Guide is not an interpretation of, or a substitute for reading, the rules in FINRA’s Code of Procedure. Nor is this Guide a substitute for legal advice. All participants in FINRA’s disciplinary process are encouraged to read FINRA’s Code of Procedure in its entirety and consult legal counsel.
This Guide is primarily for pro se respondents and attorneys unfamiliar with practice before FINRA’s Office of Hearing Officers.
Questions about proceedings before the Office of Hearing Officers should be directed to the Office of Hearing Officers at (202) 728-8008.
On This Page
- About the Office of Hearing Officers
- Disciplinary Proceedings
- Commencing Disciplinary Proceedings
- Filing and Service of Papers
- Pre-Hearing Procedures
- Post-Hearing Procedures
The Office of Hearing Officers is an independent office of impartial adjudicators (Hearing Officers) who preside over disciplinary cases brought by FINRA’s Department of Enforcement (Enforcement). The Office of Hearing Officers reports to FINRA’s Chief Executive Officer (CEO), maintains strict independence from FINRA’s regulatory and enforcement programs, and is physically separated from other FINRA departments. Hearing Officers are not involved in the investigative process. Furthermore, employment protections exist for Hearing Officers to ensure their independence. Only FINRA’s CEO can terminate a Hearing Officer, and the termination can be appealed to the Audit Committee of FINRA’s Board of Governors.
When Enforcement determines that violations of FINRA’s rules or securities laws may have occurred and that formal disciplinary action is necessary, it files a Complaint with the Office of Hearing Officers. The Office of Hearing Officers arranges a three-person panel to hear the case. The panel is chaired by a Hearing Officer who is an employee of FINRA in the Office of Hearing Officers. The Chief Hearing Officer appoints two industry panelists, drawn primarily from a pool of current and former securities industry members of FINRA’s Regional Committees and Board Advisory Committees, former industry members of FINRA’s National Adjudicatory Council (NAC), and former industry Governors. The criteria for the selection of panelists are set forth in Rules 9231 and 9232. See Rules 9231, 9232.
Hearing Officer Assignment
The Chief Hearing Officer assigns Hearing Officers to cases in rotation as is practicable.
Before a Hearing Officer or hearing panelist serves on a Hearing Panel, the Office of Hearing Officers evaluates the candidate to ensure that he or she is free of conflicts of interest and no circumstances exist where the candidate’s fairness might reasonably be questioned. Following appointment, if a Hearing Officer or an industry panelist learns of a conflict of interest or other circumstance in which his or her fairness might reasonably be questioned, he or she must inform the Chief Hearing Officer and withdraw from the matter.
FINRA’s formal disciplinary actions allege violations by members and associated persons of FINRA’s Rules, the federal securities laws and regulations, and the rules of the Municipal Securities Rulemaking Board. FINRA’s By-Laws provide that formal disciplinary actions be resolved through the disciplinary hearing process. Enforcement’s filing of a Complaint with the Office of Hearing Officers commences a disciplinary proceeding, and the conduct of the proceeding is governed by FINRA’s Code of Procedure. See Article XII of FINRA’s By-Laws; Rules 9110, 9211.
After Enforcement files a Complaint, Enforcement (represented by Enforcement’s attorneys) and the Respondent or Respondents are the “parties” to the proceeding.
Individuals may appear on their own behalf or be represented by an attorney. A partnership may be represented by a member of the partnership, an attorney, or both. A corporation, trust, or association may be represented by an officer of that corporation, trust, or association, an attorney, or both.
A Respondent who is represented by counsel must advise Enforcement and the Office of Hearing Officers of the attorney’s address, telephone number, and email address. Attorneys must file a notice of appearance with the Office of Hearing Officers. See Rule 9141.
Filing an Appearance
At the first occurrence of a party filing a Complaint, Answer, or other paper with the Office of Hearing Officers, the party must include a mailing address and an email address at which Notices, Orders, pleadings, and other communications required to be served upon or furnished to the party may be sent. The parties must serve any change of mailing address and email address during the proceeding on all other parties and file this information by email with the Office of Hearing Officers at [email protected]. See Rule 9135(d).
Ex Parte Communications
The parties to FINRA disciplinary proceedings and their legal representatives may not communicate with a Hearing Officer or panelist regarding the merits of a disciplinary proceeding unless all parties receive prior notice and have the opportunity to participate in the communication. A violation of the rule against ex parte communications may result in remedial action that could adversely affect the violator’s claims, defenses, and interests in the proceeding. See Rule 9143.
Settlement and Mediation
A Respondent may submit to Enforcement a written offer of settlement, without admitting or denying liability, at any time after receipt of notice that a disciplinary proceeding has commenced. All settlement offers must comply with the requirements of Rule 9270, including the requirement to include a statement consenting to findings of fact and violations. A Respondent may not make a frivolous settlement offer or propose a sanction inconsistent with the seriousness of the alleged violation and FINRA’s Sanction Guidelines. See Rule 9270; Sanction Guidelines.
If Enforcement does not contest an offer of settlement, and the hearing has not yet begun, the offer will be transmitted to FINRA’s Office of Disciplinary Affairs (ODA) for acceptance or rejection on behalf of the NAC. Uncontested offers of settlement that are made after the hearing has begun first must be approved by the Hearing Panel before they are sent to ODA. See Rule 9270(e).
All offers of settlement that are contested by Enforcement first must be approved by the Hearing Panel before they are sent to ODA for acceptance or rejection. If the Hearing Panel rejects an offer of settlement, it is not transmitted to ODA for consideration. See Rule 9270(f).
By submitting an offer of settlement, a Respondent waives his or her right to claim bias or prejudgment by the Chief Hearing Officer, the Hearing Officer, the Hearing Panel, the General Counsel of FINRA, or the NAC based on the consideration or discussion of the offer of settlement. In addition, if the offer of settlement is accepted, the settling Respondent waives any right to a hearing on the allegations of the Complaint, and waives any right of appeal, including the right to contest the validity of the order accepting the settlement. See Rule 9270(d).
The Office of Hearing Officers offers a voluntary and confidential mediation program to assist parties in FINRA disciplinary proceedings to resolve the matter through settlement. If Enforcement consents to discuss settlement, a Respondent may request that the Office of Hearing Officers appoint a mediator at any point in a disciplinary proceeding. See Mediation Guide.
A disciplinary proceeding begins when Enforcement serves the Complaint on a Respondent and files the Complaint with the Office of Hearing Officers. The Complaint identifies the rules allegedly violated and defines the claims to be decided by the Hearing Panel. See Rules 9131, 9211, 9212(a).
Service of Complaint
A Complaint may be served on a Respondent in any one of the following three ways: (1) personal service; (2) U.S. Postal Service first-class certified mail, or Express Mail; or (3) a commercial courier service that generates a written confirmation of receipt or attempts at delivery. Personal service and service by commercial courier or express delivery are complete upon delivery, and the Answer is due 25 days later. Service by mail is complete upon mailing, and the Answer is due 28 days after mailing. See Rules 9131, 9134.
Answer and Affirmative Defenses
An Answer is the document responding to the allegations in the Complaint. Each Respondent must file his or her Answer with the Office of Hearing Officers and serve a copy on Enforcement and all other Respondents in the proceeding. See Rule 9215.
Each Respondent has 25 calendar days from the date the Complaint is served to file an Answer and serve a copy on all of the other parties, pursuant to Rules 9133 and 9134. Requests for additional time to file an Answer must be made by filing a written motion with the Office of Hearing Officers. See Rule 9215.
The exact date when an Answer must be received by the Office of Hearing Officers may vary depending on how Enforcement served the Complaint. If Enforcement served a Respondent by personal service, commercial courier, or express delivery, service is complete upon delivery of the Complaint, and the Answer is due 25 days after receipt. If Enforcement served a Respondent by U.S. Postal Service first-class, certified, or registered mail, three days may be added to the response time, giving Respondent 28 days from the date of mailing to file an Answer. See Rules 9138, 9134(b)(3).
A Respondent must file and serve his or her Answer by email unless the Office of Hearing Officers orders an alternate form of service and filing. Service by email shall be complete upon sending the document by email. See Rule 9132(b).
An Answer must specifically admit, deny, or state that the Respondent does not have enough information to admit or deny each allegation in the Complaint. If a Respondent denies only part of an allegation, he or she must specify which part is admitted and deny only the remainder. An Answer also must state all of a Respondent’s affirmative defenses. An affirmative defense is an assertion that constitutes a defense to all or a portion of the Complaint, assuming the facts alleged in the Complaint are true. In other words, an affirmative defense attacks the legal grounds for the Complaint, not the truth of the claim. Affirmative defenses omitted from a Respondent’s Answer will not be considered in the proceeding. See Rule 9215(b) and Sample Answer.
In addition, a Respondent may file with his or her Answer a motion for a more definite statement of specified matters of fact or law to be considered or determined. The motion must state the basis for requesting more detail about the allegations in the Complaint. See Rule 9215(c).
Amendments to Answer and Affirmative Defenses
The Complaint may be amended during the course of the proceedings. If the Complaint is amended, the Respondent must file and serve an Amended Answer. See Rules 9212(b), 9215(e). Otherwise, once an Answer is filed, a Respondent can amend an Answer only with the permission of the Hearing Officer (unless an Amended Complaint has been filed). To obtain permission to amend an Answer, a Respondent must file a written motion with the Office of Hearing Officers and demonstrate good cause for amending. Generally, a Hearing Officer will not grant permission to amend an Answer if another party would be unfairly prejudiced by the proposed amendment. See Rule 9215(d).
Request for Hearing
Each Respondent has the right to request a hearing on the allegations in the Complaint. A Respondent’s request for a hearing must be included in the Respondent’s Answer. See Sample Answer. In an Answer, a Respondent also may propose an appropriate hearing location. See Rule 9221. Additionally, regardless of whether a Respondent requests a hearing, a Hearing Officer may order the parties to participate in a hearing.
If the Respondent does not request a hearing, and a hearing is not otherwise ordered, the Hearing Officer will establish a date for the parties to submit additional documentation for the Hearing Panel to consider. The Hearing Panel will issue a decision in the disciplinary proceeding based on the documents admitted into evidence.
Failure to File an Answer
If a Respondent fails to file an Answer to the First Notice of Complaint within the required time, he or she will be sent a Second Notice of Complaint requiring an Answer within 14 calendar days. If a Respondent fails to file an Answer within the time required by the second notice, the Hearing Officer may find the Respondent to be in default and treat the allegations in the Complaint as admitted. If this occurs, the Hearing Officer will issue a default decision against the Respondent, find that he or she committed the violations alleged, and impose sanctions. See Rules 9215(f), 9269.
Unless the assigned Hearing Officer orders an alternate form of filing, the parties shall file documents other than the Complaint with the Office of Hearing Officers by emailing a PDF file to [email protected]. See Rules 9132(b), 9133(b).
Form of Papers
FINRA’s Code of Procedure contains specific requirements that must be observed for papers filed with the Office of Hearing Officers, including the requirement that all submissions have a caption and be signed. See Rules 9136, 9137 and Sample Disciplinary Caption. Signing a filing certifies that the filing complies with the requirements in Rule 9137. If a filing is not signed, the filing may be rejected and not considered. See Rule 9137(b). Electronic signatures are sufficient for complying with FINRA’s requirements.
Service of Papers Other Than the Complaint
Throughout the proceeding, the parties (Enforcement and all Respondents) are required to “serve” papers on each other. “Service” is the act of providing copies of the papers to all of the other parties in the proceeding. FINRA’s Rules include specific requirements regarding service of papers. The parties must comply with these requirements each time they serve papers. Unless the presiding Hearing Officer orders an alternate form of service, parties must serve documents on each other by email. See Rule 9133(b).
The Office of Hearing Officers shall service the parties with Orders, Notices, and Decisions by email. See Rule 9132(b).
Certificate of Service
Whenever one party serves papers on the other parties in a proceeding, he or she must file a Certificate of Service with the Office of Hearing Officers. A Certificate of Service is a signed page that identifies the documents that are being served, the name of each person served, the date on which service was made, the method of service used, and if service is not being made in person, the address at which service is made. If different methods of service are used for different parties, the Certificate of Service must also state the reason different methods of service were used. The Certificate of Service must be signed by the person who caused the service to be made and attached to each copy of the papers that were served. See Rule 9135(c) and Sample Certificate of Service.
Addresses for Service
The email address for serving Enforcement is stated in the Notice of Complaint. If an individual Respondent is represented by an attorney or a member firm Respondent is represented by an attorney or representative, the attorney or representative must be served with all papers at the address indicated. See Rules 9132, 9133, 9141.
Accommodation for Electronic Service
A Respondent lacking access to the necessary technology to file, serve, and receive papers by email may file a motion seeking an accommodation to allow an alternative method of filing and serving papers. The motion must explain the reason for the request and suggest an alternate form of service. The moving party shall file its motion by Express Mail or delivery service with the Office of Hearing Officers at 1700 K Street, NW, Washington, DC 20006.
Unless the Hearing Officer determines that it is unnecessary or premature, an initial pre-hearing conference shall be held within 21 days after an Answer is served, or, if there are multiple Respondents, within 21 days after service of the last timely Answer. See “Pre-Hearing Conferences and Submissions” below. At the conclusion of the initial pre-hearing conference, the Hearing Officer will issue a Case Management and Scheduling Order. The Case Management and Scheduling Order is a comprehensive order issued by the Hearing Officer setting a date for the hearing and dates for the submission of pre-hearing materials. See Rule 9241. It is imperative that the parties carefully read the Scheduling Order, because it establishes important deadlines and provides helpful guidance as to the course of the proceeding. The Scheduling Order also provides guidance on protecting Personal Confidential Information (PCI) and Personal Sensitive Information (PSI), both of which are defined in the Case Management and Scheduling Order. See Sample Disciplinary Case Management and Scheduling Order and Sample PCI and PSI Protective Order.
When a hearing date is set, the Hearing Officer will also serve a notice on all parties stating the date, time, and place of the hearing. See Rule 9221(d).
Discovery of Documents
Unless limited by the Hearing Officer or the Rules, each Respondent is entitled to inspect and copy Documents prepared or obtained by “Interested FINRA Staff” in connection with the investigation that led to the proceeding. The term “Document” includes writings and any other physical thing, such as a photograph or data stored by computer. Rule 9251(a) lists typical Documents that may be produced for inspection and copying. The term “Interested FINRA Staff” is defined in Rule 9120(t). See Rules 9120(h), 9120(t), 9251(a).
Enforcement is obligated to begin making discoverable Documents available to a Respondent no later than 21 days after service of his or her Answer or, if there are multiple Respondents, no later than 21 days after service of the last timely Answer.
A Respondent may also request hard copies of these Documents. A Respondent who has requested copies will be responsible for the copying costs, at a rate to be established by FINRA staff, unless otherwise ordered by the Hearing Officer. See Rules 9251(d), 9251(f).
Not all Documents prepared or obtained by Enforcement during an investigation are subject to production. Generally, Enforcement may withhold Documents that (1) are privileged or constitute attorney work product; (2) were prepared by a FINRA employee but will not be offered in evidence in the disciplinary proceeding; or (3) may disclose a technique or guideline used in examinations, investigations, or enforcement proceedings; or disclose the identity of a confidential source. See Rule 9251(b).
If Enforcement fails to make available all of the Documents to which a Respondent is entitled, pursuant to Rule 9251, a Respondent may file a motion asking the Hearing Officer to order Enforcement to disclose the Documents. A Hearing Officer may order Enforcement to disclose additional Documents if he or she finds that Enforcement’s nondisclosure was not justified.
Modification of Deadlines and Schedule
During the pendency of the proceeding, a party may request that a deadline be extended. A request to extend a deadline must be made by filing with the Office of Hearing Officers a written motion stating the reason for the request and demonstrating good cause for an extension. The requesting party must provide notice of the request to all other parties to the proceeding. Generally, postponements, adjournments, or extensions of time for filing documents may not exceed 28 days unless the Hearing Officer finds that a longer period is necessary. See Rule 9222.
A “motion” is a party’s request for a ruling or order about some aspect of the proceeding. Motions may be made orally or in writing, but the Hearing Officer may require that an oral motion be set forth in writing. All motions must state the specific relief requested, along with the basis for the request. A party may file a written response opposing a motion. In some cases, the Hearing Officer may allow oral argument in favor of and in opposition to a motion. All motions, responses, and supporting briefs must comply with the requirements of the Code of Procedure. See Rules 9133–9137, 9146 and Sample Disciplinary Motion.
Motion for Summary Disposition
A motion for summary disposition is a request by a party for the Hearing Officer to dispose of one or all of the allegations or causes of action in a Complaint without a hearing. The Hearing Panel may grant a motion for summary disposition if there is no genuine issue in dispute with regard to any material fact, and the issues may be decided as a matter of law. See Rule 9264.
A party may file a pre-hearing motion for summary disposition after Respondents have filed their Answers and Enforcement has made its investigatory file available for inspection and copying pursuant to Rule 9251. Unless an earlier time is ordered by the Hearing Officer, pre-hearing motions for summary disposition must be filed at least 21 days before the hearing, and any opposition or response must be filed at least seven days before the hearing. See Rule 9264(a).
Once a hearing on the merits has begun, a motion for summary disposition may only be filed with the prior permission of the Hearing Officer. See Rule 9264(b).
Unless otherwise directed by the Hearing Officer, a motion for summary disposition must be accompanied by (1) a statement of undisputed facts; (2) a supporting memorandum, not longer than 35 pages, addressing the legal authority upon which the moving party relies; and (3) affidavits or declarations setting forth the admissible facts upon which the moving party relies. See Rule 9264(d) and Sample Disciplinary Affidavit and Sample Disciplinary Declaration.
Requests for Information–Rule 9252
Subject to the limitations explained in Rule 9252, a Respondent may request that FINRA use Rule 8210 to compel the production of documents or testimony at the hearing from persons over whom FINRA has jurisdiction. Such requests must be made in writing no later than 21 days before the scheduled hearing date. At a minimum, the motion must (1) describe with specificity the documents, including their category or type, or testimony requested; (2) state why they are material to the proceeding; (3) describe the Respondent’s efforts to obtain the documents or testimony by other means; and (4) state whether each proposed witness and the custodian of each requested document is subject to FINRA’s jurisdiction. See Rule 9252.
Production of Witness Statements–Rule 9253
A Respondent may file a written motion with the Office of Hearing Officers requesting that Enforcement produce for inspection and copying pertinent written statements of witnesses whom Enforcement expects to call to testify in the proceeding. Discoverable statements are limited to those that the Hearing Officer finds pertain to the witness’s anticipated testimony and which are stenographic, mechanical, electrical, other recordings, or a transcription thereof, and which are substantially verbatim recitals of oral statements made by the witness and recorded contemporaneously with the making of the oral statements. See Rule 9253.
The Hearing Officer will hold an initial pre-hearing conference and a final pre-hearing conference and may hold one or more additional pre-hearing conferences during the months before the hearing. The purpose of a pre-hearing conferences is to focus the proceeding and establish procedures to manage the proceeding efficiently.
For example, the following subjects may be addressed during a pre-hearing conference: (1) the simplification and clarification of issues; (2) the exchange of witness and exhibit lists; (3) the exchange of exhibits; (4) stipulations, admissions of fact, and stipulations concerning the content, authenticity, or admissibility of exhibits; (5) the production of documents and witness statements; (6) the filing and service of papers by the parties; (7) the scheduling of the filing and exchange of pre-hearing motions and briefs; (8) the scheduling of a hearing; (9) amendments to the Complaint or Answer(s); (10) the designation of relevant portions of transcripts from investigative testimony or other proceedings and the inclusion of an index for such testimony; and (11) the consideration of matters which may be admitted into evidence by Official Notice (which is described in Rule 9145(b)). In addition, the Hearing Officer may request argument on pending motions and consider other matters that may help in managing the proceeding. A party may request a pre-hearing conference by filing a written motion with the Office of Hearing Officers. See Rule 9241.
The Hearing Officer will require the parties to exchange and file pre-hearing submissions. The Case Management and Scheduling Order will establish a deadline for filing. At a minimum, the pre-hearing submissions must include (1) a narrative summary of Enforcement’s theory of the case and the Respondent’s defenses; (2) the legal theories upon which each party intends to rely at the hearing; (3) lists and copies of documents that each party intends to present at the hearing; and (4) lists of witnesses that each party expects to call with a summary of each witness’ expected testimony. If the Hearing Officer has granted a party leave to present expert testimony, he or she must also include in the pre-hearing submissions a list of experts he or she expects to call, with a statement of each expert’s qualifications, prior experience, and publications, and copies of each expert’s publications if they are not readily available. See Rule 9242(a) and Sample Exhibit.
Failure to Appear at Pre-Hearing Conferences
Any party who fails to participate in person or through a representative in a scheduled pre-hearing conference may be held in default. If the Hearing Officer finds a party is in default, he or she will deem admitted the allegations in the Complaint, find that the defaulting party committed the violations alleged, and impose sanctions. See Rules 9241(f), 9269.
The hearing provides a Respondent with the opportunity to present the evidence and arguments supporting his or her defenses to the allegations in the Complaint.
Presentation of Evidence
At a hearing, each party presents its case by submitting relevant documents and the testimony of witnesses. An oath or affirmation is administered to each witness, and testimony is elicited by asking questions. Each witness may be questioned by the other parties, the Hearing Officer, and the panelists. See Rules 9261, 9262, 9263.
The Hearing Officer will allow the presentation of evidence and arguments that are relevant and material to the disputed issues, but may exclude all offered evidence that is irrelevant, immaterial, unduly repetitious, or unduly prejudicial. Formal rules of evidence do not apply in FINRA proceedings, but the Hearing Officer may look to the Federal Rules of Evidence as a guide when making evidentiary rulings. If a party objects to evidence offered by another party, he or she must succinctly state the grounds for the objection on the record. See Rule 9263.
Transcript of Hearing
All FINRA disciplinary hearings are transcribed by a court reporter. Unless otherwise ordered by the Hearing Officer, pre-hearing conferences are also transcribed by a court reporter. The parties may purchase a transcript of any recorded hearing or pre-hearing conference from the court reporter. In addition, a witness may purchase a transcript of his or her own testimony from the court reporter. See Rule 9265.
A party or witness may seek to correct his or her recorded testimony prior to the filing of post-hearing submissions or within such shorter time as set by the Hearing Officer. Proposed corrections of the transcript must be submitted to the Hearing Officer by affidavit. The affidavit should inform the Hearing Officer whether or not other parties to the proceeding agree with the proposed corrections. After notice to all parties, the Hearing Officer may order corrections to the transcript. See Rule 9265(c).
Failure to Appear at Hearing
If a Respondent fails to appear at a hearing, he or she may be found to be in default. As a consequence, the Hearing Officer may deem admitted the allegations of the Complaint and enter a default decision against the defaulting Respondent. In addition, the Hearing Officer may impose sanctions. See Rule 9269.
Following the hearing, the Hearing Officer may require the parties to file proposed findings of fact and conclusions of law, and post-hearing briefs. All post-hearing submissions must be supported by specific references to the record of the proceeding. Unless the Hearing Officer orders otherwise, post-hearing submissions shall be filed no later than 60 days after the conclusion of the hearing and shall not exceed 25 pages in length, exclusive of cover sheets, tables of contents, and tables of authorities. See Rule 9266.
After receipt and review of the parties’ post-hearing submissions, if any, the Hearing Panel will deliberate to reach a decision. After deliberation, the Office of Hearing Officers will issue the Hearing Panel’s written decision. The decision is determined by majority vote of the Hearing Panel. Any member of the Hearing Panel may dissent from the decision of the majority and issue a separate, dissenting opinion. See Rule 9268.
Rule 9268(a) allows the Office of Hearing Officers 60 days after a date set by the Chief Hearing Officer for the preparation of the written decision. The Chief Hearing Officer generally requires the Office of Hearing Officers to calculate the 60-day preparation time from the date the Hearing Panel completes its deliberations and considers the preparation completed once the final draft is submitted for editing within the Office of Hearing Officers. Occasionally, the Chief Hearing Officer is asked to grant a short extension.
The Office of Hearing Officers will serve a copy of the decision on the parties, publish notice of the decision in the Central Registration Depository, and send a copy of the decision to each member of FINRA with which an individual Respondent is associated. See Rule 9268(d).
The decision of the Hearing Panel becomes final if a party does not timely appeal the decision and the NAC does not timely call the decision for review. See Rule 9268(e).
To appeal, a party must file a written notice of appeal with the Office of Hearing Officers and serve a copy of the notice on all other parties. The notice of appeal must be filed within 25 days after the parties are served with a copy of the decision. See Rule 9311.
The FINRA Rule 9300 Series establishes formal requirements for the notice of appeal. A party’s failure to meet the requirements may result in a loss of the right to appeal. These requirements and the procedures governing the appeal process are beyond the scope of this Guide. To preserve the right to appeal, it is important to carefully read and follow the requirements for appeal in the Rule 9300 Series in FINRA’s Code of Procedure. See Rule 9300 Series.
Post-Decision Motions for Conditions and Restrictions
After a decision is appealed or called for review, Enforcement may file a motion with the Hearing Officer to impose certain conditions or restrictions on the activities of Respondent during the appeal or review. See Rule 9285.
FINRA must promptly notify each FINRA member with which the Respondent is associated that an appeal has been filed. Any FINRA member firm with which the Respondent is associated must file a detailed, heightened supervision plan with the Office of General Counsel within 10 days of the notice of appeal or call for review and provide copies of the plan to the Respondent and Enforcement. See Rule 9285.
After service of the notice of appeal or call for review, Enforcement has 10 days to file a motion for the imposition of conditions or restrictions on Respondent pending appeal or review. The motion must specify the conditions and restrictions that Enforcement wants imposed and explain why they are reasonably necessary to prevent customer harm. The Respondent must respond within 10 days after service of the motion, unless otherwise ordered by the Hearing Officer.
The Hearing Officer can decide the motion without oral argument, although the Hearing Officer may require oral argument. The Hearing Officer must issue a written ruling on the motion no later than 20 days after the opposition. OHO must provide a copy of the written ruling not only to the parties, but also to each FINRA member with which the Respondent is associated. See Rule 9285.
Within 10 days of service of such a written ruling, a Respondent may file a motion with a NAC Review Subcommittee to modify or remove the conditions or restrictions.