One of the questions we sometimes get from financial advisors goes something like this: “I got a letter from FINRA and they’re asking for documents and information. Do I need to update my form U4 to disclose this letter?” We’ll answer that question in today’s short video.
If you’ve received a letter from FINRA and it’s asking you for documents or information in connection with one of their regulatory examinations, generally you do not need to update your form U4 to disclose that letter, reporting on the U4 that you are the subject of an investigation. Oftentimes in fact, those initial letters from FINRA may even have language that states that it is a preliminary inquiry and does not require disclosure on your form U4.
So when does the situation turn and require you to update your U4 to disclose the existence of a regulatory investigation? Well, that comes when the regulator makes a “Wells” call or sends a “Wells” letter to you. Essentially, this call or letter is the official way of stating that you are the subject of a regulatory investigation that could lead to an enforcement action against you. Until you receive that official notice through a “Wells” call or a “Wells” letter, you don’t need to update your form U4 to disclose that you’re the subject of an investigation. Of course, anytime you’re dealing with the regulators in the context of a regulatory exam or investigation, you should be working with experienced legal counsel on this to help you get through this process as cleanly and as favorably as possible. That lawyer will be able to help guide you along the way as to what needs to be reported and what doesn’t need to be reported on your form U4.
If you’re facing a regulatory exam by FINRA, you’ve received a letter just now or maybe sometime earlier and you’ve gone it alone so far, you might have some questions. If you do, I invite you to pick up the phone and give us a call at The Beck Law Firm LLC. We’d be happy to talk with you for a few minutes and see if we might be able to assist you through this process to protect yourself, your reputation, and your career as much as possible. To reach us you can give us a call at 678-344-5342. You can find much more information online at our website, at www.TheBeckFirm.com.
We also invite you to download our free book, A Stockbroker’s Guide To Regulatory Investigations. You can get that at www.BrokerDefender.com. It’s going to give you a lot of information about the regulatory exam and enforcement processes. The more information you have, the better it will be for you as you go through this process and have to make some key decisions.