Hi. I’m attorney Joel Beck of the Beck Law Firm, LLC in Lawrenceville, Georgia, and I help financial advisors protect their number one investment: their careers. One of the questions we get from time to time is, “What is an FINRA OTR, or on the record interview?” In short, an OTR is a formal interview with the FINRA staff. You, as the witness, are placed under oath to tell the truth, and are asked questions in connection with FINRA’s examination. An OTR is very similar to a deposition in a civil court proceeding, in that the interview is given under oath, and the questions and answers are recorded by a court reporter so that a transcript can be made.
FINRA uses OTRs as a regular part of their examination process, but they don’t happen in every exam. In my experience, both as a lawyer at NASD, and now in private practice, FINRA will only do an OTR when they are expecting that there will be (or may likely be) some type of disciplinary action coming as a result of their examination. In other words, when they decide to do an OTR, they’re thinking that they already have some evidence of a rule violation for which enforcement action may be appropriate.
Now, having said that, just because you’re called for an OTR does not mean that the FINRA staff is after you. You could just be a witness, but in many situations, especially if the FINRA examination is centered on your conduct – maybe it started as a result of a customer complaint, or a U5 termination notice, for example – then If FINRA is taking your testimony in an OTR, you may very well be soon facing an enforcement action.
Before you go in for an OTR, it’s certainly a wise move to get counsel involved to represent you. You should be prepared for the interview, and understand how to both listen to questions and answer them. You should know that since your testimony is under oath, you have an obligation to tell the truth, and you can possibly face perjury charges if you don’t do so.
In some situations, it might be best for an individual not to appear and testify at a FINRA OTR due to possible exposure to criminal charges. Of course, if you don’t cooperate with FINRA, you can face an enforcement action, and will typically be barred from association with a broker dealer, meaning you won’t, again, work in the broker dealer industry. But that bar may be deemed preferable than other options. Whether to appear and testify before FINRA is a decision that you should certainly make carefully with experienced regulatory counsel advising you.
If you’re facing a FINRA OTR or a FINRA examination, and you need assistance, I welcome you to give us a call here at the Beck Law Firm, LLC. We’d be happy to talk to you for a few minutes about your situation, and see if we can be of help. You can reach us at 678-344-5342. You can also download our free e-book, A Stockbroker’s Guide to Regulatory Investigations, at brokerdefender.com. That will walk you through the essentials of FINRA’s examination and disciplinary action process. The more information you have about the process you’re facing, the better decisions you can make.