FINRA Rule 8210: Provision of Information and Testimony and Inspection and Copying of Books

FINRA Rule 8210 allows FINRA officials to compel industry members, including registered financial advisors and brokerage firms, to cooperate with investigations. Indeed, under the rule, FINRA has considerable authority to request information from member firms and related individuals. Here, our experienced investment fraud attorneys highlight some of the key aspects of this rule.

Rule 8210 Explained

What Information Can FINRA Compel?

Rule 8210 provides incredibly important protections for investors, particularly investors who are involved in some type of legal dispute with their financial advisor or brokerage firm. The simple fact is that in most investment fraud cases, the vast majority of relevant information is held in the possession of the broker-dealer. You and your attorney may need access to certain documents or records to be able to fairly make your case. Rule 8210 allows investigators to obtain these records. Some common types of information that FINRA officials can compel through the use of Rule 8210 include:

• Oral or written testimony;
• Financial documents related to the plaintiff’s claim;
• Records of interactions with client; and
• Documents or records deemed relevant to the case at hand.

 
Understanding the Very Broad Scope of the Rule

Under Rule 8210, FINRA has the legal authority to require member firms (and associated persons) to produce documents and to submit to on-the-record testimony with respect to any:

• Investigation;
• Legal complaint; or
• Examination

As many other FINRA rules are broad, most notably FINRA Rule 2010, which requires firms and associated individuals to uphold high standards of commercial honor and maintain principles of equitable trade, the agency’s ability to investigate alleged misconduct is always quite broad. Put another way, Rule 8210, in conjunction with all other FINRA rules, gives the organization considerable power to compel the production of documents or testimony. An investigation can be initiated for many different reasons and almost all documents and records held by the broker can be compelled.

Can Brokers and Broker-Dealers Ever Hold Information Back?

In some very limited circumstances, registered brokers and brokerage firms may be able to push back against document requests. To do so they must be able to convince FINRA officials that the documents or information requested is either:

• Clearly irrelevant;
• Far too broad given the circumstances; or
• Unduly burdensome.

However, ultimately, strong and broad investigatory powers are held by FINRA’s Department of Enforcement. While brokers and broker-dealers may appeal directly to FINRA, there is no outside appeals process available to them. In the event that brokers do not comply, they can be sanctioned. Indeed, the failure to provide documents or testimony requested by the organization could result in brokers or brokerage firms facing fines, suspension, expulsion or the loss of all pending legal claims.

Were You a Victim of Investment Fraud?

We can help. If you lost a substantial amount of money investing with a broker or brokerage firm, please reach out to our team today at 844-689-5754 for free legal help. At the Sonn Law Group, we have offices in South Florida, Orlando and Houston and we represent investors throughout the United States, Mexico, Puerto Rico and South America.