At the Law Offices of David S. Rich, LLC, we have substantial experience representing professionals in disciplinary investigations and formal disciplinary actions brought by New York State 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, specialist assistants, lawyers, judges, certified public accountants, dentists, mental health practitioners, nurses, podiatrists, psychologists, veterinarians, 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, signed statements in response to the allegations; (2) researching the sanction guidelines of the New York or federal administrative agency or of the self-regulatory organization, 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 mitigating circumstances; (3) preparing the professionals for on-the-record interviews and participating as the professionals’ counsel; (4) negotiating settlements; and (5) 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, physician assistants, and specialist assistants by the New York State Office of Professional Medical Conduct (the “OPMC”)
- Disciplinary hearings for physicians, physician assistants, and specialist assistants before the OPMC
- Grievance investigations brought against lawyers before Attorney Disciplinary Committees
- Formal disciplinary proceedings against attorneys in New York’s Appellate Division
- Investigations and formal disciplinary actions brought against judges before the New York State Commission on Judicial Conduct
- 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, and other licensed professionals by the New York State Department of Education’s Office of Professional Discipline (the “OPD”)
- Disciplinary actions against dentists, mental health practitioners, nurses, podiatrists, psychologists, veterinarians, and other licensed professionals before the OPD
How Disciplinary Investigations Arise
An investigator for the New York State or federal administrative agency or for the self-regulatory organization, as the case may be, prepares 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.
(When the investigator is assigned by the New York State Department of Education’s Office of Professional Discipline (again, the “OPD”), the investigator will not send, to the professional, an inquiry letter. Instead, the OPD investigator will call the professional’s practice or business, identify himself or herself as being from OPD, and ask for a copy of the professional’s records in the case or matter about which a complaint has been received.)
The agency’s or SRO’s inquiry letter may ask the professional to provide a signed, written statement about potential violations of laws governing, or rules of, the profession or industry. Further, the agency’s or SRO’s inquiry letter may asks the broker to answer a list of particular questions and to provide copies of all correspondence or memoranda referring to the matter.
So, too, the New York or federal administrative agency or the self-regulatory organization may, in an on-the record interview, make the professional testify under oath.
Disregarding the agency’s or SRO’s requests for information or books and records typically results in a significant penalty. such a lifetime ban from the industry or a suspension from practice.
If you are a professional in the New York City area 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 York State or Federal Administrative Agencies, or Self-Regulatory Organizations, Issue Inquiry Letters
New York State or federal administrative agencies, as well as self-regulatory organizations, issue inquiry letters in various circumstances. Four common scenarios are:
- Grievance. An individual customer or client 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.
- Colleague. A professional colleague, who suspects that a professional may have committed misconduct, reports the professional to the agency or SRO.
In New York, all licensed health professionals, including physicians, physician assistants, specialist assistants, must report colleagues whom it reasonably appears are guilty of professional misconduct. A licensed health professional’s willful violation of his or her duty to report colleagues’ wrongdoing is itself misconduct.
Similarly, a lawyer who knows that another lawyer has committed a violation of the New York Rules of Professional Conduct that raises a substantial question as to that lawyer’s honesty, trustworthiness or fitness as an attorney shall report him or her to a Court or a disciplinary committee.
- Adversary or Judge. The litigant who, in a pending or concluded lawsuit, is adverse to a lawyer’s client submits, to a disciplinary body, a complaint against the lawyer. Similarly, and on occasion, a judge presiding over an attorney’s client’s lawsuit may make, to a disciplinary committee, a complaint against the attorney.
- 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 skillfully prepares, on behalf of professionals, written statements responding to inquiry letters propounded by New York 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 bring out mitigating circumstances and to negotiate a favorable settlement.
The administrative agency’s or self-regulatory organization’s investigator reviews the professional’s written statement responding 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 York 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 analyzes 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 an Attorney Disciplinary Committee of a Letter of Caution or an Admonition
- The issuance by the CFP Board of a letter of caution;
- The imposition by the OMPC of an administrative warning and/or the provision by the OMPC for consultation with a panel of one or more experts;
- The issuance by the OPD of a Corrective Action Required Letter or an Administrative Warning letter
An informal disciplinary action is appropriate where, for example:
- 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 substandard medical practice 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 York 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; or an order to disgorge profits to investors.
Most formal disciplinary actions settle before litigation through the issuance 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 unable 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 has the rights to appear and testify at the hearing, to be represented by counsel at the hearing, to call and question witnesses, to cross-examine the agency’s or SRO’s witnesses, and to present evidence on his or her behalf. Further, 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 York 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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