FINRA Rule 8210 and Investor Protection: What Recent Enforcement Highlights

When investors entrust their savings to financial professionals, they rely on a framework of oversight to keep the markets honest. At the heart of this framework is FINRA Rule 8210—the regulator’s “subpoena power.”

A recent disciplinary complaint filed by FINRA’s Department of Enforcement against Tory A. Duggins (CRD #4556340) serves as a critical reminder of why this rule exists and what happens when transparency breaks down.

The Core of the Complaint: A Failure to Cooperate

According to the Office of Hearing Officers, FINRA is investigating potential churning and excessive trading in customer accounts handled by Mr. Duggins during his tenure at Spartan Capital Securities, LLC (2016–2024).

The investigation hit a roadblock when Mr. Duggins allegedly failed to appear for on-the-record testimony. Under Rule 8210, registered representatives are required to provide information and testimony when requested. By failing to show up, a broker effectively impedes FINRA’s ability to protect the public.

Regulatory Context: A History of Disciplinary Actions

The complaint highlights that this is not the first time Mr. Duggins has faced regulatory scrutiny. To understand the significance of the current investigation, it is helpful to look at his prior disciplinary record:

• 2014 Sanction: Mr. Duggins was previously fined and suspended for discretionary trading without written authorization and making misstatements to his firm’s compliance department.
• 2024 Suspension: More recently, he was issued an 18-month suspension for violating Regulation Best Interest (Reg BI). The findings indicated he recommended a series of excessive trades to customers—including seniors—resulting in over $250,000 in losses and $444,176 in total costs.
• 2026 Pending Action: The current complaint focuses specifically on his refusal to provide testimony regarding new allegations of churning and excessive trading between 2022 and 2024.

Why Rule 8210 is Your “Shield”

Investors should view Rule 8210 as a foundational “shield.” Without the power to compel testimony, regulators could not:

1. Expose Hidden Misconduct: Some violations, like verbal misrepresentations, can only be uncovered through direct testimony.
2. Accelerate Justice: Rule 8210 allows FINRA to move quickly to stop ongoing harm.
3. Maintain Industry Standards: It ensures that “bad actors” cannot simply remain silent to avoid consequences.

Legal Nuance: A Rule 8210 enforcement action focuses specifically on the failure to cooperate. A broker can be barred from the industry for silence alone, regardless of whether the underlying trading violations are ever proven.

What This Means for You

For the individual investor, this case highlights three vital principles:

• Monitoring Account Activity: “Churning” is the practice of trading frequently just to generate commissions. If you see a high volume of trades that don’t seem to benefit your bottom line, it is a major red flag.
• The Importance of BrokerCheck: Always review a professional’s CRD history. Prior suspensions often signal a pattern of behavior that merits closer scrutiny.
• Systemic Oversight: Even if a single investor doesn’t report a problem, FINRA’s proactive use of Rule 8210 acts as a systemic “tripwire” to catch broader misconduct.

Sonn Law Group’s Perspective

At Sonn Law Group, we believe that regulatory proceedings like this provide the roadmap for investor recovery. While FINRA focuses on punishing the broker, our firm focuses on recovering your losses.

If your accounts show signs of excessive trading or if you were recommended unsuitable investments, the facts of your specific case—your risk tolerance, age, and investment objectives—will determine your legal remedies.