Locked up, they won't let me out...

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Last week I was reminded to cover with you a growing and career threatening issue. Some firms have concluded that stepping ahead of FINRA by applying more harsh than might be appropriate discipline is their best path in avoiding the firm be sanctioned and or fined. It is frightening because in many cases capital punishments are being used just to impress as the "???????? ??????????????????" enforcer. Not to get into all of the hammers being used let's just cover the one now most frequently applied. The benign appearing, and sounding, "?????????????? ??????????????????????'' penalty box.

?????????????? ?????????????????????? is not a direct reporting to FINRA but the advisor who gets the distinction is part of the FINRA examination file that lists him or her, with all of the others who may share the same attention. FINRA can and does inquire on statuses and follow-ups. It is much like "Super Secret Probation." All of the special supervision letters include a duration and may highlight certain investment behaviors that cannot be used by the advisor even though for others they are normal processes. No ETFs, No discretionary management, No 1035 exchanges, no options, no new securities based lending (margin), etc... Seems straight forward but there is a gotcha.

Duration of Special Supervision can be extended at the firm's discretion. There is no absolute get out of jail date. The investment restrictions can be permanent again at firm's call. But, most concerning the advisor on "SpecSup" is a lifer on the most scary of lists: The "?????? ?????? ?????????? ???????????????? ????????." You are at heightened risk of career disruption, at that firm, pretty much indefinitely. So what to do when confronted with the issue?

My always rule comes to the first thought: Get professional advice form a pro level consultant and probably a FINRA expert lawyer. There is little that can be done to keep you off ?????????????? ?????????????????????? if the firm wants you on it however, there are best practices "???????? ?????????? ??????????," to survive it and never look back!

Many advisors think escape to another firm is the path of least resistance. ?????? ??????? ??????????!? Every firm asks if you are currently on "???????????????????? ??????????????????????" on their pre-hire questionnaire. In the very unusual chance you find a firm that wants you while on a "????????" the new U-4 asks the question yet again and you are inviting high levels of scrutiny from FINRA and often worse, State Securities Commissions. Truth is there is only one clear path to avoiding perdition: Get best professional counsel on the penalty box requirements, follow the advice, complete the demands, and then make clear distance from the firm that put you there!

If you would like to discuss your own circumstance and or gain a referral to Best In Class Legal Counsel please reach out. https://calendly.com/masada-consult/compliance-issue-consultation?

Our consultation is without cost to you, we like to save lives and make friends. The lawyers we refer do not compensate us and we don't compensate them. If one day we guide you to a better place, or you refer a friend, the right fit firm affiliation pays us nicely.?

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