Worried That Your Next SEC Audit Will End in Fines? TAKE THE ASSESSMENT

7 Issues for Which Financial Advisors and Firms Should Consider Hiring a Regulatory Defense Attorney

7 Things Consider Hiring a Regulatory Defense Attorney

As a financial advisor, your primary focus lies in excelling at what you do best: generating wealth for your clients and your firm. However, it’s all too common for financial advisors to find themselves entangled in non-revenue-generating matters such as compliance, employment concerns, and other unrelated problems. These distractions consume valuable time and energy that could otherwise be dedicated to enhancing your business and maximizing returns for your clients. Moreover, when confronted with an investigation by the Securities and Exchange Commission (SEC) or a criminal inquiry, maintaining your client-centric focus becomes even more challenging. But there’s no need to panic. At My RIA Lawyer, our team of seasoned regulatory defense attorneys is here to assist. Below, you’ll discover seven potential challenges that financial advisors and firms may encounter, along with compelling reasons why enlisting the services of a regulatory defense attorney should be a top consideration.

1. Contacted by the SEC

Has the SEC or any other state securities or commodities industry attorney or examiner contacted you? If this has happened to you, consider hiring a regulatory defense attorney right away. Don’t assume you can handle an investigation on your own. Investigations can be complicated and time-consuming, and regulators won’t take it easy on you simply because you’re representing yourself. As we discussed in a previous blog, understanding what the SEC Division of Enforcement (DOE) looks for and how they operate when conducting examinations is critical to the success of your business.

2. Compliance Protection

Good compliance is good business®. But developing a comprehensive compliance program takes time and effort. Although compliance doesn’t generate revenue for you or your clients, it can save you money in the long run. Hire a compliance attorney now to develop a robust compliance program before facing fines and other penalties for compliance violations.

Sometimes it takes a compliance violation or investigation to demonstrate the importance of a robust compliance program. However, if you are currently dealing with compliance issues, it’s not too late to save yourself some time and effort. Don’t try to handle any compliance violations on your own. Hire a regulatory defense attorney who can handle your case and ensure that you receive the best outcome possible. Our firm handles SEC compliance for Registered Investment Advisors (RIAs), including those who are also FINRA Broker-Dealers or are registered with the National Futures Association and Commodity Futures Trading Commission. From our RIA Compliance University to our ongoing compliance packages of services and the outsourced compliance department, we have a variety of service options to meet your needs. Contact us today to learn how our SEC compliance attorneys and Compliance Officers can help you protect your company.

3. Employee Termination

An RIA should have a written termination policy in place before terminating an employee. Any investigation that leads to an employee’s termination should be thoroughly documented. Without a strong termination policy, you may end up spending a significant amount of time defending a wrongful termination lawsuit—time that could have been spent working for your firm and clients.

If a former employee has filed a wrongful termination lawsuit against you, hire a regulatory defense attorney to handle your case. You need someone who knows and understands the complexities of employment law and its relation to the financial investment business. You don’t want to be on the hook for a wrongful termination if you don’t have to be.

You may also waste time and money if you are involved in client disputes. To make matters worse, the state may fine you for failing to respond adequately to any red flags raised by the terminated employee’s activity prior to termination. We discussed employee termination in more detail in a previous blog you can read here.

4. Arbitration

The arbitration process can be lengthy and time-consuming due to multiple pre-hearing conferences, discovery requests, and motions. It is in your best interest to have an experienced arbitration lawyer by your side because arbitration involves legal language, documentation, and procedures that can be difficult to understand and navigate. While arbitration is not as difficult as going to trial, you must still navigate complicated regulations and laws. In addition, the opposing party is likely to have legal representation. You will have difficulty presenting compelling evidence to defend yourself against the claim if you go it alone. At My RIA Lawyer, our attorneys have experience fighting for financial advisors and getting results.

5. Whistleblower

The SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity. If a whistleblower has come out against you or your firm, the suspicions of wrongdoing can have serious consequences. It is important to note that 12,200 whistleblower tips were received by the whistleblower program during the previous fiscal year, and $564 million was awarded to 108 individuals. These statistics demonstrate why it is always a good idea to have a mock audit performed on your business to determine where you can improve and where you are succeeding. A mock audit is an excellent way to start over and reassert your policies and procedures to ensure that your company and employees are in compliance with federal and state securities laws. Call us today to schedule a mock audit of your company. If you are being charged or investigated for wrongdoing due to a whistleblower’s claims, we can also assist you with your response.

6. SEC DOE Action

If the SEC DOE has notified you that you are the subject of an enforcement action, an attorney from My RIA Lawyer can assist you. To avoid the frustration, mental anguish and cost of going to hearing, the attorney may suggest settling. Settlements can help to lessen the impact to your firm’s reputation and finances. Your lawyer may be able to help you reach a favorable settlement that does not require you to admit fault. If you agree to settle the claim, your attorney will have some say in how the SEC presents the alleged misbehavior, which can help preserve your reputation. Contact one of our attorneys today to discuss settlement and other options you may have.

7. Securities Investigation

A simple document request or deposition can quickly turn into a formal investigation. The government has most likely been building the case against you for months, if not years, at this point, and everything you say can and will be used against you. This is not the time to venture out on your own. Contact My RIA Lawyer right away. Our securities litigation attorneys can help you navigate this complicated process. We have extensive experience in both civil and criminal securities litigation and work tirelessly to defend our clients.

Contact My RIA Lawyer Today: Good Compliance is Good Business®

If you are facing any of these seven issues, we can help. At My RIA Lawyer, our regulatory compliance geeks help financial advisors and firms navigate the legal complexities of the RIA world. We work virtually, long-distance, with clients from coast to coast. To schedule a consultation with our RIA compliance nerds, we look forward to hearing from you.


Copyright© 2022. My RIA Lawyer. All rights reserved.

The information in this blog post (post) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm. It is not intended to substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.

Author Bio

Leila Shaver is the Founder of My RIA Lawyer, a law firm that provides compliance and legal consulting for financial institutions. With extensive experience as a securities attorney and compliance expert, she has served as Chief Compliance Officer and General Counsel to RIAs, BDs, and TAMPs with billions in assets under management.

Leila understands the challenges RIAs face and is committed to helping RIAs streamline their processes, mitigate risks, and ensure compliance with regulatory requirements. She received her Juris Doctor from Atlanta’s John Marshall Law School and is a West Georgia Young Lawyers’ Association member. Leila has received numerous accolades for her work, including the Carroll County Bar Association’s Outstanding Young Lawyer Award in 2017.

LinkedIn | State Bar Association | Avvo | Google