“FINRA Witnesses” refers to individuals who provide information to the Financial Industry Regulatory Authority (“FINRA”). FINRA is not an agency of the United States Government. It is technically a private organization, or a “self-regulatory organization” (an “SRO”), but it operates with powers delegated to it by the U.S. Securities and Exchange Commission. FINRA does not have jurisdiction over everyone; it only has authority over securities firms doing business in the United States that are Members of FINRA and “associated persons”, such as registered representatives working for those securities firms.Sometimes people reach out to FINRA on their own because they have information about a fraud or other violation of the federal securities laws that they think FINRA should know about. Other times, FINRA may ask someone to talk to them over the telephone or to come in to FINRA’s offices to talk about something. FINRA sometimes makes this request informally through a letter or a telephone call. This is called an “informal request”. Other times, FINRA may send someone a formal notice in accordance with its official Rules that requires that person to come in and answer FINRA’s questions under oath.
“FINRA witness” usually means someone who may have information about a securities fraud or other violation of the securities laws. But that is not always the case. Sometimes FINRA thinks a person might have some information, but it is not certain. For example, this sometimes happens when FINRA is investigating something and they want to talk to everyone who worked in a securities firm or in one of the securities firm’s particular offices or departments, to find out who, if anyone, may know something about what FINRA thinks happened.
A FINRA witness may be someone who did nothing wrong but who came across some information that one or more other people may have committed a fraud or other securities violation. A FINRA witness may also be someone who may have committed or helped others to commit a fraud or securities violation; such people are sometimes referred to as “subjects” or “targets” of an investigation. While FINRA sometimes may not be willing to use the terms “subject” or “target”, they are terms that are often used by people outside of FINRA. When people talk about a “subject” of an investigation, they usually mean someone who FINRA thinks may or may not have committed a fraud or securities violation, but FINRA cannot be certain without more information. “Target” is usually used to refer to someone who FINRA likely thinks actually did commit a fraud or securities violation, based on information that FINRA has at the time. All of these people are technically “FINRA witnesses” or potential FINRA witnesses.
Over the course of a FINRA investigation, someone who FINRA initially believes may be just a witness may come to be viewed as a “subject” or a “target”. Likewise, over the course of a FINRA investigation, someone who FINRA initially believes may be a potential “subject” or “target” may come to be viewed as just an innocent witness. Again, sometimes FINRA may not be willing to use these terms, and may instead simply refer to someone as a “witness” if anything.
When someone talks to FINRA, the conversation may be done informally over the telephone or in a FINRA office, and one or more FINRA lawyers will often take handwritten notes of what is said. This is more likely to happen when the person contacts FINRA and requests a telephone call or a meeting on their own. When FINRA asks a person to talk to it “informally”, the person may or may not be sworn in under oath to tell the truth, and the conversation may or may not be recorded word-for-word in an official transcript. When FINRA sends someone a formal notice to appear for testimony, that person will usually be sworn in under oath and the deposition (sometimes called an “On The Record” or “OTR”) will typically be recorded word-for-word in an official transcript.
If you would like information about The Pickholz Law Offices’ experience representing FINRA Witnesses, or those who believe that they may become a FINRA witness, please feel free to click on the “Sample Matters” link and the other links on the right side of this page.
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FINRA Witnesses | FINRA Witness