Series 7: 18.4.1.5.1. Restrictions And Heightened Supervision During The Appeals Process

18.4.1.5.1. Restrictions and Heightened Supervision During the Appeals Process

If a firm or associated person is found to have committed a violation and this finding is appealed, the firm or associated person’s activities may be restricted during the appeals process. In order for this to occur, the Department of Enforcement must file a motion with the Hearing Officer proposing restrictions that are “reasonably necessary for the purpose of preventing customer harm.” The Hearing Officer may rule on the motion right away or give the firm or associated person 10 calendar days to file a motion objecting or proposing alternative restrictions. Whether such restrictions are imposed, and the nature of the restrictions, is decided by the Hearing Officer.

When an associated person is found to have committed a violation and the finding is appealed, she is subject to heightened supervision by her employing firm. The extra supervision must be “reasonably designed to prevent or detect a reoccurrence of those violations.” The firm must file a plan of heightened supervision with FINRA within 10 calendar days of the a