Disciplinary Actions Against a Registered Representative

If another industry regulator takes disciplinary action against a representative, the employing member firm must notify FINRA. Actions by any of the following should be immediately disclosed to the association:

  • SEC
  • An exchange or association
  • State regulator
  • Clearing firm
  • Commodity regulatory body

All disclosures must include the type of action brought as well as the name of the party bringing the actions and the name of the representative involved. FINRA members are required to regulate the activities of its associated people and must disclose to the association any action that the member takes against a registered representative. 

Termination for Cause

A member may terminate a registered representative for cause if the representative has:

  • Violated firm policy
  • Violated the rules of FINRA, SEC, or any other industry regulator
  • Violated state or federal securities laws

A firm may not terminate a representative who is the subject of investigation by any securities industry regulator until the investigation is completed.

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