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FINRA Rule 8210

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Jan 23, 2010 11:16 am

Does anyone know anything about FINRA Rule 8210? I was terminated from my previous firm for what I feel was a pretty minor event. I got my U-5 in the mail and the reason stated was "violation of company policy". My former manager basically admitted after the fact that I got screwed and that HR was looking for any reason to reduce staff. All the U-5 anwsers are “no” since the event was not investment related, there was no complaint and there was no violation of industry rules or regulations. <?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />


So now there is a FINRA guy sending me letters, asking for a statement from me for a preliminary inquiry. Is this just standard procedure or should I be worried? I called the guy and he made it sound like this was all routine but if FINRA tries to make a big deal out of this I might need to get a lawyer.


Any thoughts or experience with this?


Jan 23, 2010 1:21 pm

Was a crackdown last year.  Used to be companies only posted for investment related terms and then FINRA upped the ante and wanted all invol terms listed.  You can put a response on your record.  If he just wants a statement, keep it short and sweet and move on.  Happens to alot of folks. 

Jan 24, 2010 11:11 pm

LEK - Bill is correct.  FINRA is not your friend.  Don’t trust them.  Get some help.  Sounds like you need it.

Jan 25, 2010 12:28 am

Thanks. I sent him a basic response to what happened, nothing omitted or exaggerated, just the facts as I recalled. Hopefully they move on to more important stuff but I am going to maintain a healthy level of skepticism until this is over.  Joel Beck in GA has a great blog that details the process of a FINRA inquiry that gave me an idea of how it should unfold. If it becomes a formal investigation or if I have to give a on-the-record statement then I will definitely get an attorney. Thanks again Bill.  

Sep 16, 2011 12:02 am

Hi L_E_K,

Just wanted to check what happened with your case, did you hear anything else. I am in similar situation and trying to figure out what to expect.


Oct 6, 2011 1:53 am

This rule permits FINRA to ask and receive whatever they want.  It's their license to go on a fishing expedition.  The examiner will be all nice and cordial but they won't waste a moment making a disciplinary referral if they detect a violation.  Their policy changed where they review ALL adverse U5 terminations to see if they can find something.  They especially look for "violations of company policy," like yours because it doesn't really say anything about the nature of the termination.  With 8210 they will have already spoken to the firm and will now inquire with you to check and compare your stories and see if they can pursue something.  As a former chief compliance officer of 10 years, I would count the number of days it would take an examiner to send their 8210 when I discharged a rep for cause.  

Can you do it alone?  Tread carefully and treat their requests seriously.  Don't deny them or blow them off.  Doing so may very well prompt a bar from the industry.  Consult with an attorney that has experience dealing with FINRA.

good luck!