New Jersey Professional Disciplinary Actions

At the Law Offices of David S. Rich, LLC, we have substantial experience representing professionals in investigations and formal disciplinary actions brought by New Jersey and federal administrative agencies or by self-regulatory organizations (“SROs”).

The professionals whom we defend in investigations and formal disciplinary actions include, for example, securities industry professionals, certified financial planners, physicians, physician assistants, lawyers, judges, certified public accountants, dentists, mental health practitioners, nurses, podiatrists, psychologists, veterinarians, chiropractors, midwives, pharmacists, architects, and many other types of licensed professionals.

The Law Offices of David S. Rich, LLC represents professionals in all stages of the process: (1) drafting the required, written response to the allegations; (2) reviewing for privilege and responsiveness, and producing, books and records demanded by the New Jersey or federal administrative agency or of the self-regulatory organization, (3) researching the sanction guidelines of the New Jersey or federal administrative agency or of the SRO, published decisions of the administrative agency or SRO, and published decisions of Administrative Law Judges in proceedings before the agency or SRO to develop legal defenses and to identify extenuating circumstances; (4) preparing the professionals for on-the-record interviews and taking part as the professionals’ counsel; (5) negotiating consent orders and settlements; and (6) answering disciplinary complaints, making pre-hearing motions, and litigating disciplinary hearings.

Types Of Investigations And Disciplinary Actions In Which We Represent Professionals

Among the types of investigations and disciplinary actions in which we represent professionals are the following:

• Investigations and formal disciplinary actions brought against employees in the securities industry by The Financial Industry Regulatory Authority, Inc. (“FINRA”)
• Investigations, civil actions, and administrative actions brought against officers, directors, and employees in the securities industry by the U.S. Securities and Exchange Commission (the “SEC”)
• Ethics investigations brought against certified financial planners by the Certified Financial Planner Board of Standards, Inc. (the “CFP Board”)
• Disciplinary hearings for certified financial planners before the CFP Board
• Misconduct investigations of physicians by the New Jersey State Board of Medical Examiners (the “NJ BME”)
• Disciplinary hearings for physicians before the New Jersey State Board of Medical Examiners
• Misconduct investigations of physician assistants by the NJ BME’s Physician Assistant Advisory Committee
• Grievance investigations brought against attorneys, by the New Jersey Office of Attorney Ethics (the “NJ OAE”), before District Ethics Committees (“DECs”)
• Public disciplinary hearings, for accused lawyers, before the New Jersey Disciplinary Review Board (the “NJ DRB”)
• Misconduct investigations of judges by the New Jersey Advisory Committee on Judicial Conduct (the “NJ ACJC”)
• Disciplinary investigations of certified public accountants (“CPAs”) conducted by the American Institute of Certified Public Accountants (the “AICPA”)
• Formal disciplinary actions against CPAs before the AICPA’s Joint Trial Board
• Misconduct investigations of dentists, mental health practitioners, nurses, podiatrists, psychologists, veterinarians, chiropractors, midwives, pharmacists, architects, and other licensed professionals before the appropriate Professional and Occupational Boards and Committees of the New Jersey Division of Consumer Affairs (the “NJ DCA”)
• Disciplinary actions against dentists, mental health practitioners, nurses, podiatrists, psychologists, veterinarians, chiropractors, midwives, pharmacists, architects, and other licensed professionals before the applicable Professional and Occupational Boards or Committees of the NJ DCA

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How Disciplinary Investigations Arise

An investigator for the New Jersey or federal administrative agency or for the self-regulatory organization, as applicable, draws up and sends, to the professional, a letter or a notice of investigation stating that the administrative agency or SRO is conducting an inquiry into some matter.

The agency’s or SRO’s inquiry letter may ask the professional to furnish a written response to the allegations about potential violations of laws governing, or rules of, the profession or industry. Further, the agency’s or SRO’s inquiry letter may ask the professional to answer a list of particular questions and to provide copies of all correspondence or memoranda referring to the matter.

So, too, the New Jersey or federal administrative agency or the self-regulatory organization may, in an on-the record interview, compel the professional to testify under oath.

Flouting or ignoring the agency’s or SRO’s requests for information or books and records typically results in a substantial penalty, such a lifetime ban from the industry or a suspension from practice.

If you are a professional in New Jersey and you have received, from an administrative agency or a self-regulatory organization, an inquiry letter, a notice of investigation, or a telephone call, contact the Law Offices of David S. Rich, LLC.

Circumstances In Which New Jersey Or Federal Administrative Agencies, Or Self-Regulatory Organizations, Issue Inquiry Letters

New Jersey or federal administrative agencies, as well as self-regulatory organizations, issue inquiry letters in various scenarios. Four common circumstances are:

• An individual customer, client, or patient of the professional, who believes he or she has been the victim of professional misconduct, submits, to the agency or SRO, a written complaint against the professional.
• A professional colleague, who believes that a professional may have committed misconduct, reports the professional to the agency or SRO.

In New Jersey, all licensed health care professionals, including, among many others, physicians, physician assistants, and dentists, must report colleagues where the reporting professional possesses information which reasonably indicates that the colleague has demonstrated an impairment, gross incompetence or unprofessional conduct which would present an imminent danger to an individual patient or to the public health, safety or welfare. A licensed health care professional’s violation of his or her duty to report colleagues’ impairment, gross incompetence or unprofessional conduct is itself misconduct.

Likewise, a lawyer who knows that another lawyer has committed a violation of the New Jersey Rules of Professional Conduct that raises a substantial question as to that lawyer’s honesty, trustworthiness or fitness as an attorney in other respects, must report him or her to the appropriate disciplinary authority.

• Adversary or Judge. The litigant who, in a pending or concluded lawsuit, is adverse to an attorney’s client submits, to a disciplinary body, a complaint against the attorney. Similarly, and from time to time, a judge presiding over a lawyer’s client’s lawsuit may make, to a disciplinary committee, a complaint against the lawyer.
• Agency’s or SRO’s Own Initiative. When the agency or SRO has evidence that a professional may have violated securities laws or may have committed other professional misdeeds, the agency or SRO, on its own motion, may issue an inquiry letter to the involved professional.

For example, the U.S. Securities and Exchange Commission (again, the “SEC”), after obtaining evidence of possible violations of securities laws from any of a variety of sources, may, on its own initiative, issue an inquiry letter to an officer, a director, or an employee in the securities industry. These sources include, for example, market surveillance activities and media reports.

The Law Offices of David S. Rich, LLC adroitly prepares, on behalf of professionals, written responses replying to inquiry letters propounded by New Jersey or federal administrative agencies or by self-regulatory organizations. Even if the professional has committed the charged violations of laws or rules, the Law Offices of David S. Rich, LLC may be able to show extenuating circumstances and to negotiate a favorable settlement.

On-The-Record Interviews

The administrative agency’s or self-regulatory organization’s investigator reviews the professional’s written response replying to the agency’s or SRO’s inquiry letter.

The agency or SRO may issue additional requests for information and documents and may require the broker or advisor to appear and, in an on-the record interview, to testify under oath.

If you are a professional and a New Jersey or federal administrative agency or a self-regulatory organization has called you to testify under oath in an on-the-record interview, contact the Law Offices of David S. Rich, LLC.

Informal Disciplinary Actions

At the close of the administrative agency’s or self-regulatory organization’s investigation, the agency’s or SRO’s staff evaluates the evidence and the law and determines whether a violation appears to have occurred. In less serious cases, the matter may be resolved with an informal disciplinary action, such as:

• The issuance by FINRA of a Cautionary Action;
• The dispensation by a District Ethics Committee of a Letter of Caution or an Admonition
• The issuance by the CFP Board of a letter of caution;
• The issuance by the NJ BME of a letter of warning;
• The issuance by a Professional or Occupational Board or Committee of the NJ DCA of a letter of warning

An informal disciplinary action is warranted where, for instance:

• The violation is of a minor nature and there is no customer harm or detrimental market impact; or
• There is professional misconduct of a minor or technical nature, or there is ordinary medical negligence by a physician which does not constitute professional misconduct.

An informal disciplinary action is one that is not publicly reported. Instead, an informal action is a private admonishment that the administrative agency or SRO believes the professional has violated laws or rules.

Formal Disciplinary Actions

In more serious cases, the staff of the New Jersey or federal administrative agency or of the self-regulatory organization may recommend formal disciplinary action. Depending on the profession or industry, sanctions in formal cases may include, among other penalties, a censure; a reprimand; a monetary fine; suspension or expulsion from the securities industry; suspension, revocation, or limitation of the professional’s license; suspension or revocation of the right to use the Certified Financial Planner marks; diversion of the professional to a monitoring program; an order to pay restitution to customers; an order to disgorge profits to investors; or an order to reimburse the New Jersey or federal administrative agency or the SRO for the costs of the investigation or for attorneys’ fees and costs.

Most formal disciplinary actions settle before litigation through the entry of a settlement agreement. Depending on the profession or industry, the settlement agreement may be called, among other titles, a Letter of Acceptance, Waiver and Consent (an “AWC”), an Offer of Settlement, or a consent order. A settlement agreement is a document, available to the public, which sets forth the agency’s or SRO’s findings of fact and the sanctions imposed.

If the professional is not able to settle, with the administrative agency or SRO, the formal disciplinary action, then the agency’s or SRO’s enforcement department, market regulation department, or other prosecuting office files or issues a complaint or written charges against the professional. The professional files an answer to the complaint.

The professional and the agency or SRO try the case at a disciplinary hearing. Depending on the profession or industry, the professional and the agency or SRO may try the case before a Hearing Officer and two industry panelists, before an administrative law judge, before a hearing panel of three or more members, or the like.

The disciplinary hearing is not as a formal as a trial in court, but it takes place in a similar manner. The professional enjoys the rights to appear and testify at the hearing, to be represented by a lawyer at the hearing, to call and question witnesses, to cross-examine the agency’s or SRO’s witnesses, and to put forth evidence on his or her behalf. In addition, the professional has certain rights to appeal from any adverse decision of the hearing panel.

On behalf of professionals, the Law Offices of David S. Rich skillfully negotiates, with New Jersey and federal agencies or SROs, settlements of formal disciplinary actions. When a settlement cannot be reached, the Law Offices of David S. Rich aggressively defends the brokers in disciplinary hearings before hearing panels.

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