FINRA & SEC Regulatory Defense Attorneys — Bakhtiari & Harrison

Why early legal representation matters in regulatory investigations

Financial professionals who receive a FINRA Rule 8210 request or SEC inquiry frequently make a critical mistake: they attempt to respond without legal counsel, believing the matter is routine or that cooperation will resolve it quickly. The opposite is usually true. Every response to a regulatory inquiry — written or verbal — is on the record and becomes part of the evidentiary record if the matter escalates. Statements made without counsel, documents produced without privilege review, and positions taken without strategic analysis can significantly harm the financial professional’s position at every subsequent stage of the proceeding.

Ryan Bakhtiari’s service as FINRA NAMC Chairman gives the firm direct institutional knowledge of how FINRA’s enforcement staff approach investigations — what they look for, what they consider serious, what resolution paths are available at each stage, and what arguments are most persuasive in Wells submissions and formal proceedings. This is not knowledge that can be replicated by general securities defense counsel.

FINRA regulatory defense

FINRA Rule 8210 requests

FINRA Rule 8210 grants FINRA broad authority to require member firms and associated persons to provide documents, testimony, and information in connection with any examination, complaint, investigation, or proceeding. Rule 8210 requests are not optional — failure to respond fully and timely can result in sanctions up to and including a permanent bar from the industry, regardless of the underlying alleged violation.

Bakhtiari & Harrison manages the full 8210 response process: reviewing the scope of the request, asserting applicable privileges, determining what must be produced and what need not be, preparing the financial professional for any required testimony, and crafting the written response to minimize additional exposure while fully satisfying the regulatory obligation.

For detailed guidance on Rule 8210 responses, see the firm’s blog post on FINRA 8210 requests.

FINRA Wells Notice response

A FINRA Wells Notice is formal notification that FINRA’s enforcement staff has concluded its investigation and intends to recommend charges — along with an invitation to submit a written response (Wells submission) before formal proceedings are filed. The Wells submission is one of the most important documents in any FINRA disciplinary case: a strong submission can prevent formal charges from being filed or significantly narrow the scope of any action. A weak or poorly structured submission can foreclose resolution options and accelerate formal proceedings.

Bakhtiari & Harrison prepares Wells submissions with the specific knowledge of FINRA enforcement priorities and internal decision-making that comes from Ryan Bakhtiari’s direct institutional experience. The firm’s submissions are targeted, factually grounded, and strategically calibrated to the specific decision-makers who will review them.

For a detailed explanation of the Wells Notice process, see the firm’s blog post on Wells Notice defense.

FINRA disciplinary hearings

When a FINRA matter proceeds to formal disciplinary hearing before the Office of Hearing Officers, the stakes are at their highest — potential outcomes include fines, suspensions, and permanent bars from the industry. Bakhtiari & Harrison handles formal FINRA disciplinary hearings: drafting the answer to the complaint, conducting discovery, preparing witnesses, and presenting the defense at hearing. David Harrison’s prosecutorial background as a New York City assistant district attorney gives the firm direct trial experience that purely transactional securities attorneys cannot match.

FINRA AWC negotiations

Most FINRA disciplinary matters that proceed past the Wells Notice stage are resolved through an Acceptance, Waiver and Consent (AWC) — a negotiated settlement that specifies sanctions without a formal hearing. Whether to accept an AWC, and on what terms, is one of the most consequential decisions a financial professional can make. Bakhtiari & Harrison evaluates the strength of FINRA’s case, the realistic outcome at hearing, the career and reputational implications of the AWC terms, and whether the proposed sanctions are consistent with FINRA’s own published Sanctions Guidelines before advising a client on whether to accept or reject an AWC.

For detail on the AWC process, see the firm’s blog post on AWC attorney representation.

SEC regulatory defense

SEC investigations

The Securities and Exchange Commission has broad investigative authority — including the power to issue subpoenas, compel testimony, and freeze assets in emergency proceedings. SEC investigations differ from FINRA investigations in important ways: the SEC can bring civil actions in federal court as well as administrative proceedings, potential sanctions include disgorgement and civil penalties in addition to industry bars, and SEC investigations can run parallel to criminal referrals to the Department of Justice.

Bakhtiari & Harrison represents financial professionals and firms in SEC investigations from the initial informal inquiry through formal order of investigation, Wells Notice, and if necessary, civil or administrative proceedings. David Harrison’s prosecutorial background gives the firm direct knowledge of how federal enforcement investigations are structured and what arguments resonate with enforcement staff.

SEC Wells Notice response

An SEC Wells Notice follows the same general structure as a FINRA Wells Notice — it is formal notification of intent to recommend charges and an invitation to respond. The stakes in SEC Wells proceedings are typically higher than FINRA, because SEC enforcement actions can result in federal court litigation and criminal referrals in serious cases. Bakhtiari & Harrison prepares SEC Wells submissions with the same strategic rigor applied to FINRA submissions.

State securities regulator defense

Financial professionals are subject to oversight by state securities regulators in addition to FINRA and the SEC. State regulators — operating under Blue Sky laws and the NASAA model rules — conduct their own examinations, investigate complaints, and bring disciplinary actions against registered persons. Bakhtiari & Harrison represents financial professionals in state regulatory proceedings in California and multiple other states.

Common triggers for regulatory investigations

• Customer complaints: FINRA receives complaints directly from investors and routes them to Enforcement when they suggest potential rule violations.
• Outside business activity disclosures: OBA violations and selling away are consistently among the most investigated FINRA rule categories.
• U4 disclosure failures: failure to timely disclose reportable events on Form U4 is an independent violation separate from the underlying event.
• Examination findings: FINRA’s routine cycle examinations of member firms frequently surface individual representative violations.
• Whistleblower referrals: SEC and FINRA whistleblower programs generate referrals that can trigger formal investigations.
• Market surveillance: FINRA’s automated market surveillance systems identify suspicious trading patterns that may trigger investigation.

Frequently asked questions — regulatory defense

What should I do immediately upon receiving a FINRA Rule 8210 request?

Do not respond without legal counsel. Contact Bakhtiari & Harrison immediately. The 8210 request will specify a response deadline — typically two weeks — but counsel can often obtain an extension to allow for proper preparation. Every document produced and every statement made becomes part of the regulatory record. The first response sets the tone for everything that follows.

Can a FINRA investigation result in criminal charges?

In serious cases — particularly those involving intentional fraud, misappropriation, or Ponzi schemes — FINRA may refer matters to the Department of Justice or the SEC, which can bring criminal charges. This is one reason why early legal representation with counsel experienced in both regulatory and criminal defense is essential when the underlying conduct involves intentional wrongdoing. Bakhtiari & Harrison evaluates criminal referral risk as part of its regulatory defense assessment.

What is the difference between a FINRA investigation and a FINRA disciplinary proceeding?

A FINRA investigation is the preliminary stage — FINRA is gathering facts and assessing whether a violation occurred. A disciplinary proceeding is the formal stage — FINRA has determined that charges are warranted and has filed a complaint. Most matters are resolved before reaching formal disciplinary proceedings, through Wells submissions and AWC negotiations. Engaging counsel at the investigation stage maximizes the options available before formal proceedings are initiated.

Does Bakhtiari & Harrison handle state securities regulatory matters outside California?

Yes. The firm represents financial professionals in state regulatory matters in multiple states. Ryan Bakhtiari is admitted in California, New York, Texas, the District of Columbia, and multiple federal courts. David Harrison is admitted in California and New York.

For a full overview of the firm’s financial professional representation practice, visit the Registered Persons page.

Contact a regulatory defense attorney — free consultation

Contact Bakhtiari & Harrison for a free, confidential consultation. Our FINRA attorneys review every potential matter at no charge. Financial professional cases are handled on a flat fee or hourly basis.

Financial professional cases are handled on a flat fee or hourly basis. Initial consultations are free.

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