Saturday, March 27, 2010

Felonies and FINRA registration

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A customer recently emailed a question to me that touches on an important testable point: statutory disqualification. Here is the question:

I have been charged with felony forgery in the past year. I received probation and did not inform my firm. When my broker-dealer found out, they updated my U5 and terminated me. Now FINRA is investigating me for failing to update my U4 with the felony forgery information. My criminal information is now on BrokerCheck. Can I realistically get hired in the business again?

RESPONSE:
Forgery is directly related to the securities industry and would be a big problem whether a felony or a misdemeanor. There are bad-boy agents out there who will sell a deferred annuity to an unsuspecting senior citizen, then tell the customer to sell the thing and conceal the nasty surrender charge by forging the client's signature on the paperwork to do the annuity sale or switch. Also, so much sensitive information is provided by clients to registered reps that any crimes of dishonesty are major red flags to FINRA. To follow up by failing to update your U-4 with the negative information also hurts, because, in their eyes, it's another blatant form of dishonesty. Then again, if you cooperate with the investigation, maybe they'll suspend you, which is temporary. A bar is also very likely, unfortunately, and--unfortunately--a bar means "game over" in FINRAspeak. Wish I could be more upbeat about the situation, but it doesn't look good. Still, why not wait to see how the investigation ends up. Talk to an attorney who works in this area. More bad news: your state Administrator is likely to also take action if FINRA alerts them of any disciplinary decisions. Be sure to cooperate with all the regulators and try to get some good advice and/or representation by an attorney, who will want his or her retainer upfront. Be sure to be sitting down when they quote their retainer. Cooperating with FINRA can only help, while refusing to cooperate will keep people out of the business permanently every single time. You might want to go to http://www.finra.org/ and look up the enforcement section and discplinary orders. Read through the recent cases that led to temporary suspensions and permanent bars to get a feel of how things generally turn out. I wish the violation were more of a goof-up than two separate acts of dishonesty. "A member, in the conduct of his business shall observe high standards of commercial honor. . . " is the basic creed of FINRA and all the other self-regulatory organizations. Without trust, the system can't function.

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585 comments:

  1. I'm wondering if you might have any insight into my situation: I was convicted of a Theft 1 Felony (shoplifting), it was subsequently reduced to a misdemeanor and in another 8 months I can get my record expunged. In the short term and long term, how will this effect my ability to get something like a series 7 license?

    Thanks

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  2. Thanks for commenting. Shoplifting will be a major red flag to potential employers, FINRA, and the state securities regulators. Whether a felony or a misdemeanor, theft is generally a deal-breaker. Any crimes that concern money or dishonesty generally keep people out of the business for ten years. But relief from "statutory disqualification" is done on a case-by-case basis, assuming you can get hired. I'd say your chances of getting hired and registered are not great, but probably not impossible. The business is worth lots of money to those who get registered; consider investing a few hundred dollars now for some good legal advice.

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  3. You’re being generous with your comments Robert. Technically everything you said is accurate, but in this economy disciplinary action like this is the kiss of death considering the fact it must be disclosed to both the firm you work for any all your clients.

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  4. You're right--but if there is a sliver of hope, I can't say for sure that it's not worth trying to get an exception to statutory disqualification. ;)

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  5. What about not being registered yet? Suppose you have a felony dui and would like to become a registered rep. It seems the rule used to relate to securities felonies, but has since been upgraded to all felonies for ten years. Is this true?

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  6. Suppose you have a felony dui and would like to become a registered rep. Eventhough it is not securities related I read on finra's site that since July 19 2009 all felonies are considered statutory disqualifications for ten years. My question is, does this apply to non-registered reps?

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  7. FINRA doesn't get specific about felonies. The statutory disqualification covers any felony and then any misdemeanor related to dishonesty or money: perjury, forgery, fraud, theft, extortion, counterfeiting, check kiting, etc.

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  8. I am in a similar situation. As a young single guy out partying with drinking buddies 10 years ago, like a moron I ended up getting charged with public indecency (misdemeanor), which is now sealed from public view. I know this was juvenile and silly but am concerned that my hopes for gaining a license and a good career in finance are shot. Is a finance career a lost cause? How would finra and potential employers react?

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  9. Actually, it doesn't appear that you're in a "situation" at all with FINRA. You were charged with a misdemeanor, and that misdemeanor has nothing to do with the securities industry. I'm not a lawyer, but the way I see it, when U-4 asks, "Have you ever been convicted of or pled guilty or nolo contendere ("no contest") in a domestic, foreign or military court to a misdemeanor involving: investments or an investment-related business or any fraud, false statements or omissions, wrongful taking of property, bribery, perjury, forgery, counterfeiting, extortion, or a conspiracy to commit any of these offenses?" and then asks if you've ever been "charged" with any of those things, your TRUTHFUL answers would be . . . No." So, if you had stolen a statue from the town square, for example, you'd be in big trouble, whether it was a misdemeanor or a felony. But, if you merely p***ed all over the statue after a night of partying, you're fine as far as FINRA goes.
    As far as employers go, I doubt this will be a big problem. I mean, if their recruiting advertisement indicates that they prefer candidates with college degrees, by definition, they have to hire former college boys, and, by definition, former college boys probably got drunk and silly a couple of times along the way to graduation. Not that they necessarily stop such behavior once they start making big money for themselves and the firm. I would think that rowdy, immature behavior would be tolerated more in the brokerage industry than any other industry outside professional sports . . . not just in the past but going forward. So, basically, if the firm can't overlook a 10-year-old drunken incident, they're too uptight to work for, anyway.

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  10. R, Thanks a lot for your response. This makes sense, but I was scouting online boards and a few people mentioned that for several firms (like Goldman for eg) even any 'hint' of trouble with the law is an automatic ding even for internships. And hence I was concerned that everytime I change jobs I might have to face this even 20 years later. I was seriously thinking to just start fresh abroad - maybe apply for an S&T or buy shop abroad (London, HK, Singapore) where hopefully this silliness won't follow me for life. During checks, US firms of course would be able to see even minor/sealed legal trouble etc. since they have access to FBI NCIC. Appreciate your advice.

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  11. Many brokers get hired with MUCH bigger red flags than what you're disclosing. Your behavior sounded very consistent with what goes on at the annual meetings at many broker-dealers I'm familiar with. If broker-dealers are in a hiring mode, I would be shocked if you couldn't get hired because of that non-securities-related misdemeanor. It's a case-by-case basis, so no one can tell you for sure what will happen. I just don't see why you need to flee to Singapore over this thing. If you can sell, you can get hired in the brokerage business. A theft charge or forgery would make me nervous--what you did does not even have to be disclosed on U-4. Which online boards were you checking out? I'd like to see how others explain it.

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  12. I was checking WallStreetOasis.com where people were talking about things like DUIs (which are also non-security related) and how firms like goldman and others have sometimes withdraw offers over such things. Even yahoo answers seem to have some posting about finance careers with criminal record. Eg:

    http://answers.yahoo.com/question/index?qid=20081007165615AAqY1bq

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  13. thanks, I'll check it out. What you're talking about applies to ANY employer in ANY industry. As far as FINRA goes, this is not relevant. Goldman can hire anyone they want (or not). Just not sure why that firm thinks its the arbiter of personal morality.

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  14. This is a very helpful website. I, unfortunately, actually have a serious offense in my past and would like your thoughts. Almost 12 years ago at the age of 20, I was convicted of aiding and abetting bank larceny by willfully allowing a former friend to steal money from the bank at which I worked. There is no good reason for commiting such a serious offense, but I was trying to fit in. I was given four years of probation and restitution, completed in 2002. Since the time of the conviction, I went on to college and tried to better myself so that I could be a positive influence on society. I have held a professional job since graduating from undergrad and for the past ten years (with publicly traded companies), without any incident. I would like to leverage my MBA to enter the investment banking field; however, will my FINRA application be automatically rejected? Any advice you can offer would be great. Thank you.

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  15. Thanks for the good words. I would say that the statutory disqualification process is really never set on "automatic." It's a case-by-case approach, even if the felony had occured within the past 10 years. On the other hand, I can't think of a worse crime for somebody who wants to get hired by a broker-dealer and given the okay by the regulators. If the applicant helped to steal from a financial institution, I'm not sure how many financial institutions would want to hire him. Then again, what have you got to lose by sending out resumes and filling out U-4's? Time? A little bit of gas money? Let me know what happens here. I don't like your chances at all, but I can't say it's impossible. With an MBA, you have other avenues outside investment banking, of course.

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  18. I'm not sure if every U-4 triggers a thorough background check by FINRA. I've seen agents get accepted by FINRA, but then the state that granted the securities agent license runs a check and finds a conviction that wasn't disclosed . . . leading to a revocation of the license. Game over.

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  19. Well isn't a DUI an unrelated misdemeanor? Or even any of the above misdemeanors unrelated simply because they are not investment related or have to do with theft, bribery, etc.? If they are unrelated shouldn't they not have to be declared on the U4 but rather declared with only your employer?

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  20. A misdemeanor DUI would not be disclosed on U-4. The misdemeanors that have to be disclosed involve money or dishonesty, basically. And then, all felonies have to be disclosed.

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  21. Lets say someone is working in the operations department in settlements for 2 and a half years and has the series7. If that person has a misdemeanor charge for taking less than $20 that occurred 6 years ago and did not disclose it on the original u4 form because they were under the assumption from their lawyer that they got deferred adjudication and that it would be removed after successful completion of the probation what will most likely be the outcome of this? lets say that person is now working with there compliance department in getting the u4 form amended. The compliance dept is in full support of the employee and is sending a recommendation letter wanting to keep the employee and the employee is sending a document detailing the events of the charge and to amend the U4 and the reasoning why it was not disclosed on the initial U4 and wanting make sure everything is done correctly and disclosed properly. (The license has not been held a year yet so the initial u4 is the only once completed) with the details of this what is your take on how finra will proceed with this. Will the situation be an immediate disqualification?

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  22. Thanks--it's not automatic or immediate disqualification ever, really. Regulators take everything on a case-by-case basis. Sure was a small amount of money, but if they want to be tough, they can easily say that you answered the questions on U-4 dishonestly. Not sure why an attorney would tell you to say "no" to that question. The right answer was "yes," and then you tell your story on a "DRP" or "disclosure reporting page." Period. You don't answer questions on U-4 cleverly, based on some interpretation you're not sharing with FINRA. BTW, the woman in the link below tried to say that someone told her how to answer the question--I don't think the regulators cared what somebody told the applicant. FINRA is one problem. The state(s) where you need are another. Check out this link, and you'll see that many state regulators don't "negotiate" over the filing of false documents: http://www.passthe63.com/enforcement/stephanieelliott_coor.pdf. Also, any kind of theft is a major red flag for this industry. I'd say don't give up or assume you have no chance, but don't be shocked if either FINRA or the state regulator(s) or both become a major problem. They do work with people, though. Maybe they'll grant the registration subject to heightened supervision. Just cooperate and respond to everything promptly.

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  23. Have you heard from others, or possibly know of a case that might be similar to this:
    I've got my heart set on going into asset mgt. unfortunately I have a felony dui from 7 years ago, clean and sober for 7 years, can provide letters of character reference to attest to this, the charge did not involve any injury to persons or property or anything close to violating a fiduciary duty nor did it occur during work hours. I've continued to attend AA, graduated summa cum laude from an MBA program (emphasis in finance) and just sat for level 2 cfa exams begining of June. My thoughts have been to put as much time between the incident and as much accomplishment as possible to give reasonable basis for allowing me to go through, but am still pretty nervous about filing the u-4, etc. I have been hired at a RIA firm and the feeling was that b/c it isn't securities related I should be okay, like I say though just worried, maybe looking for experiences from others or yourself to help mitigate those.

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  24. This isn't a FINRA matter; it's a matter for your state securities department. But, you'd have to disclose it even after 10 years; in fact, indefinitely on U-4. Surprisingly, if you were forming your own RIA, after 10 years you would not have to disclose it on AdV, which is kind of strange. I like your chances here. No one can predict what will happen. You're being open and honest about it; that's the right path to take.

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  25. I've been reading this blog and it's been very helpful but none of this pertains to my situation.

    I've been trying to get into the financial industry for over a year now since I graduated, When I was 19, 20, and then again at 21 I got charged with drug related felonies. In 5 years I gained professional experience and 4 year education. I'm now 26 but it wasn't until this past year that I was convicted. In my case, when would the 10 year rule begin? are these disqualification for the series 7 and 6 only? Can I get a series 11 or a 17 then a 68/67? Or is this an issue with every FINRA license? My degree is in acccounting, would it make sense to get my foot in the door as an associate analyst at an independent research firm?

    More info: I passed and applied for my LAH insurance license last year - after a year of a pending status - I ordered them to make a decision - I was approaching a year since the course work and exam - They denied me - I immediately appealed - NYS DOI's attornies are looking into whether the whould go through with the appeal based on my inability to obtain a CRD. What kind of effect if any would this have on decisions by FINRA?

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  26. Thanks for commenting. The statutory disqualification is an across-the-board disqualfication to associate as a rep or a principal, so the particular license does not seem to be relevant. If you were charged/convicted of three drug-related felonies, I'm thinking you had to have been manufacturing or distributing--those aren't just possession charges, right? If that's the case, we have major red flags, since you would have engaged in an illegal money-making scheme, as opposed to merely being addicted to a harmful substance. Concerning the dating, the statute reads "within ten years of the date of the filing of an application for membership or participation in, or to become associated with a member of, such self-regulatory organization." So, I'd say it could go either way. If you really want to get in the business, it's worth trying.

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  27. So Robert, just to confirm - Ask.com states that ANY conviction for ANY crime is likely to cause an applicant's license to be denied. You state that incidents unrelated to the securities industry, which I want to believe; however, is this the cse with a 14-year old case, fully adjudicated, of DUI, assault and vandalism?

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  28. The word "likely" can mean a lot of things. Is 51% likely? 70%? 90%? Specifically, were the DUI, assault and vandalism convictions and charges felonies or misdemeanors? If misdemeanors, I don't see where you'd even disclose them on the U-4. Non-securities-related misdemeanors. It's a case-by-case basis. I've seen applicants denied for minor offenses, but I've seen principals allowed back in even after being convicted of crimes.

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  29. Can I be statutory disqualifed for a felony related to a bad check if I received deferred adjudication in Texas?

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  30. check kiting causes problems whether it's a felony or a misdemeanor conviction, as it's directly related to the financial industry. Financial crimes and crimes of dishonesty are the red flags. It's not an automatic disqualification, though. I can't prove this with numbers, but I think I'd rather have a felony DUI than misdemeanor check kiting on my U-4. But, it's a case-by-case basis. You'll tell your story; hopefully, the regulators will be reasonable at both FINRA and your state.

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  31. Yeah, it was actually for a "bounced" rent check- I think I am the only person in the world who has a felony for bouncing their rent check (landlord was a prominent attny). The Texas state board said they have a prequalification process where you can actually apply before you get hired and they can review your application and give you a preliminary background check approval. She said you have the opportunity to explain your case and the circumstances make a difference. Does FINRA offer something like that?

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  32. FINRA does not do that, but they're likely to view things pretty close to how Texas will, and since you have to get licensed by Texas, anyway, I would see what they determine. The prominent atty didn't just want his money--he pressed criminal charges? WTF? You ALWAYS get to tell your side of the story in any state regulatory, FINRA, or SEC hearing.

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  33. So, I'm applying to a firm where I'd be basically selling life insurance, long term care, disability - the insurance end of it, I was fingerprinted for FINRA and have had some e-mails back and forth from the contracting people at the firm - it was never particularly explained well but I believe they submitted me as a NRF non-registered fingerprinted person, and there have been a couple of speed bumps along the road:

    1.) I have from 2001 an arrest that for whatever reason - perhaps because I had more than one bag, was listed in the ARREST record as Possession with intent to distribute, but CHARGED as only possession (I wasn't distributing anything) - ultimately I made a deal to have it dismissed if I donated $$ to DARE, etc... I have sent in records and did disclose it on my application materials...

    2.) I did have a dentist and an attorney get small-claims judgements against me for personal bills - both are paid and satisfied, but they did want copies of that, which I provided. I will admit my credit report is not the greatest as I was selling real estate when the market went to shit, wasn't earning very much then...

    3.) I apparently had something in my record from 2000 when I had an argument with my mother that was listed as an arrest but was never charged - it was listed as disorderly conduct and criminal damage to property (slamming a door on her house as I left), the officer at the time decided it had been blown out of proportion and never filed charges, but it was still listed as an arrest. I got docs from the chief of police and a letter on his letterhead signed by him stating it was never charged, an affidavit from my mother giving her side of the story and that she regretted it getting blown so far out of proportion, etc... As I say though, I did not disclose this as I didn't know it was on my record anywhere as nothing came of it - no charges - and when my NRF stuff was submitted to FINRA, they apparently sent something back that it was not disclosed, and I then got and provided all the info on it to the company.

    Given all that, what are the vegas odds this will pass FINRA scrutiny for a NRF? I've been going back and forth with the company contracting people since March, and they just recently got around to submitting it all to FINRA. Obviously, the rep I'm hoping to work for is anxious to get me out there... any advice?

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  34. #1 doesn't look bad--if it's misdemeanor possession, that's not asked about on U-4. #2 just has to be disclosed; it's not a reason to keep somebody out. #3 I don't quite understand--were you charged with a felony?

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  35. No, no felonies charged, ever - #3 was never even charged at all, arrested but no charges ever filed, police decided not to charge me at all, so I didn't disclose it initially because no charges were filed, but FINRA must have seen it on my arrest report and asked for additional information and docs to show it was never charged. I provided that along with a letter from the police department indicating it was never charged.

    #1 - in the notes on the police report they indicated they were thinking about charging me with felony possession with intent because there were 2 baggies, but ultimately they only charged the misdemeanor possession.

    So, that being said, I did not disclose #1 because my understanding of the question was that it didn't require disclosure - wasn't asked about.

    FINRA did see it on my arrest record apparently, though, and asked my firm for information about it so I provided court documents and a letter wherein I explained the circumstances... They also asked for the same documentation showing #3 was never charged, which I provided.

    Both #1 and #3 seemed to me, based upon the questions asked, to not be necessary to disclose, so I didn't, however FINRA did then ask my firm for additional information specifically referencing those items presumably because they showed up on my arrest record. I didn't want to be combative and say "but they don't require disclosure", so I just played along...

    I understand my firm submitted all those explanations and docs to FINRA a couple days ago, and said it should take about a week for them to review the info...

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  36. Looks like you did everything correctly. You disclosed what you had to, FINRA asked for more information and you, wisely, provided it. I would be surprised if FINRA did not grant your registration. The process may also have to take place with your state regulator(s), too.

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  37. Hey I just graduated from college and I have an opportunity to be sponsor for the series 7 exam. My problem is after I graduated I received my first(and last) DUI. I am currently waiting for my license suspension and probation. Also when I was 19 I had a couple felonies of assault but I entered an ARD program and expunged it off my record. I also have have a Disorderly conduct for indecent exposure.(peeing in public) Last I have numerous speeding tickets. Will I still be able to get my series 7? And any advice on how I should handle the situation.

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  38. The recent DUI is a misdemeanor charge, right? If so, there's no place to disclose it on U-4. The felony assault charges and convictions must be disclosed--expunged off the record is meaningless to FINRA. Peeing in public was a misdemeanor, right? So, there's no place to disclose that one. Speeding tickets--no felonies, right? So, nothing to disclose on U-4. I don't see any theft or fraud on your record. You'll probably be okay. But, for God's sake, my friend, FRICKIN SETTLE DOWN! You aren't a high school or college boy anymore.

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  39. Thank you! And yes I'm trying to stay out of trouble.

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  40. if i got a motion to dismiss for a theft by check charge, will that still show up on my finra background check. Also, does finra contact previous employers to verify dates worked there and reason for dismissal,etc.?

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  41. Based on that you would have to answer "yes" when asked if you've ever been charged with a misdemeanor involving wrongful taking of property. You would answer "no" when asked if you were convicted. Or, if that was a felony charge, you would answer "yes" you were charged but "no" you were not convicted. And, then you'd explain the situation on a DRP (disclosure reporting page). FINRA requires the member firm hiring you to verify information. One of the rules states, "Each member shall have the responsibility and duty to ascertain by investigation the good character, business repute, qualifications, and experience of any person prior to making such a certification in the application of such person for registration."

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  42. So finra themselves don't actually contact previous employers, they count on your existing firm to have done it?

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  43. FINRA would not have the time to do that. Doesn't mean they don't occasionally catch things that the member firms missed. The state regulators end up catching things missed by broker-dealers, too. I assume they do some random auditing/checking of applicants. And, if the firm hired somebody without checking the background, the firm would be fined, or the principal at the firm.

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  44. But, either way, you're going to have to lay it all out in the open. Period. Doesn't matter who's going to do the checking--if you lie on the application, the career will end suddenly and permanently when the truth comes out.

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  46. Oops--would the individual who just posted a question about transportation for sale re-post the question? I hit the wrong button and deleted it. Trying to correct a typo and--oops. Sorry.

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  47. I apologize if this is redundant, I read that FINRA makes decisions on a case by case basis, but I wanted to get your feedback on my situation. I was caught with a fake ID when I was 19 and charged with felony forgery. Do they look at this as dishonest? How difficult do you think it will be to get registered? Thanks in advance.

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  48. You're right, it's always case-by-case. How long ago was this? If it's within the previous 10 years, that will make it tougher. Forgery is a problem, a red flag. There are all kinds of customer forms that could be altered or surreptitiously filled out by a registered representative. Some rep's have gotten ATM cards issued in the name of a client, then gone around withdrawing funds from the client's account. They, of course, no longer work in the industry. I don't know what FINRA will decide. Broker-dealers will also have to look at the incident and decide if they want to go down that road with you. If a B/D is willing to hire you, I think that tells you your chances are good--firms generally know what will and won't get past FINRA.

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  49. Regaeding last comment: It was only four years ago, I just graduated. Does it matter if the case was dismissed? Sealed? both? It was a 3 year deferred sentence which I completed. The plea of guilty was withdrawn, the case dismissed and then I got it sealed.

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  50. In general, everything matters to FINRA, all the relevant circumstances surrounding the case will be considered. You will explain these circumstances on a "DRP" or disclosure reporting page. The regulators may request more information through some follow-ups. There is no way to predict what their decision will be. Maybe they'll grant your registration but make sure the firm supervises you more closely than the typical registered rep. It's possible they won't grant the registration. Either way, there is FINRA, but then you also have to get your state securities regulator to grant you a license, and that could lead to a whole separate process.

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  51. I have a couple of failure to appear misdemeanors that I have not disclosed on my state application. Would this be grounds for denial? I hadn't disclosed this on my U-4 either as they were non-securities related misdemeanors.

    Also the underlying offense was traffic related.

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  52. Looks like you were right--that is not a securities-related misdemeanor. Unless your state has some specific rule about "failure to appear," I don't see how that would lead to a denial. For example, in IL, if you owe money on a student loan, your license can be denied.

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  53. I live in New York and I was convicted of 4 misdemeanors before reaching the age of 21 but all 4 still show up on my back round check. I have 1 DWAI misdemeanor, 1 identity theft misdemeanor, 1 petit larceny misdemeanor, 1 criminal impersonation misdemeanor. The circumstances that surrounded all 4 charges are "BS" and just childish and the charges were all blown out of proportion. I was hired with a firm and they even did all full back round check and said I would be ok because its them that takes the liability not FINRA. I am filling out my U4 this week and not sure if I should check yes for the misdemeanor part due to the fact that it was NOT securities related. But on the question it mentions stolen property etc etc so I am a little confused on what to do. I am 26 years old now and its been 6 years thats passed for all 4 charges and I haven't been in trouble since. And again they are all misdemeanors

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  54. Petit larceny has to be disclosed, and--I'm almost sure--so does identity theft. Any "theft" has to be disclosed, and, actually, the securities regulators might find that to be the most disturbing. Why? Registered reps have been known to get ATM cards issued in their clients' names and then go around withdrawing cash from the clients' accounts. So, I'm sure they'll find it relevant. The DWAI charge has nothing to do with the U-4, not unless it's a felony.

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  55. R. Walker,
    Thanks for your time helping us.

    I have a question.

    I was taking a wooden bench that was the university's property back in college. I was arrested by the University police and charged with theft of movable property... a misdemeanor. It was subsequently dismissed by the court.

    Now based on your experience and knowledge, how will this affect my ability to obtain a meaningful career in the securities industry? (I must disclose the charge)

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  56. if you have a dismissed theft under $500 charge on your record will this disqualify you from receiving any FINRA licensing?

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  57. Oops--I haven't received two comments back-to-back before and should have published each separately. Oh well. This will still work.
    RE: the wooden bench caper. You must answer "Yes" when asked if you've ever been charged with a securities-related misdemeanor. How will this affect your ability to get in the business? It will make the registration process slower and more difficult. You'll have to tell your story on a DRP (disclosure reporting page) and may have to respond to further questions from FINRA. No one can say for sure what will happen, but I would be shocked if that kept you out of the business.

    Re: theft under $500. No one can tell you for sure what will happen. You have to disclose the charge. But, you were not convicted, right? So the answer to that question is truthfully "no." FINRA will sweat you. Cooperate with them

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  58. The Wooden Bench GuyAugust 30, 2010 at 5:24 PM

    Re: Walker @ 8/30 4:26PM

    I'm just concerned because it is my understanding that a lot of banks will not even look at your application if "yes" is checked off anywhere. Especially because the applications are now all online and ask you these questions before hand (maybe a computerized automatic disqualification to maintain corporate image). They probably would rather not have to deal with the liability.

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  59. Hi,

    Fantastic feedback you have been providing and I really appreciate it. Here's my situation and I was wondering if you could help out:

    Arrested for felony possession of cocaine (it's a simple possession charge but with cocaine it will always be a felony) last May in 2009. Disclosed to my compliance at my firm of the arrest a week after. For a couple of weeks following the arrest my lawyer worked on having the prosecutor not press charges. Didn't work out and was charged in early June. Notified my compliance of this as well.

    I entered a pre-trial diversion program where if I completed it then one year from my arrest the charge would be dismissed. The charge was dismissed this May and fortunately it is in the process of getting expunged.

    U-4 wasn't amended til November of 2009 because it wasn't clear whether it was reportable since the charge was going to be dismissed and the case was to be expunged.

    After my firm spoke with FINRA it was informed that it needed to be disclosed, we amended the U-4 in November and provided every document relating to the charge. It appeared that there was no issue at the time with FINRA. It looks like there was confusion initially as to whether or not it needed to be disclosed on the U-4 but once we found out it needed to be, we got all the documents together and provided them.

    I left my firm this June and was U5'ed with no issues at all. I received a letter from FINRA two weeks ago stating that they were doing an inquiry and that they had some questions regarding the disclosure. More or less they wanted to know:

    1)When did my firm become aware of my charges?
    a) Why did I notify my firm?
    2)When did I become aware that I was being charged?
    3) Why didn't I notify my firm within 30 days of being charged?
    4) Why was this disclosed on my U4 in November?


    I responded to their letter before the deadline. I answered it to the best of my memory following what I have explained in this post. I attached the pertinent court documents that I have and a document that I had showing our correspondence with FINRA when the U4 was amended.

    Based on what you know, does it look like everything should be ok? I mean, I believe I took all the right steps and my firm did the same when we updated the U-4. Is FINRA following the usual motions on this one or should I be concerned that they are taking a different view on the situation?

    I really appreciate any feedback that you might have, I've been trying to research similar cases but it's hard to find a good example considering I was charged, had the charges deferred pending completion of my program, had the charges dismissed upon completion and am getting the charges expunged.

    I was arrested in a state where you have the option to go through that program and have the charges dismissed and get them expunged.

    ReplyDelete
  60. Re: Wooden Bench Guy
    Yes, some firms are all pristine (in their deluded little minds) and will have a problem with it. Many other firms would overlook it. I think you can get in if you really want in.
    Re: Cocaine possession guy
    Here's where the problem begins as far as I can tell: U-4 wasn't amended til November of 2009 because it wasn't clear whether it was reportable since the charge was going to be dismissed and the case was to be expunged.

    "It wasn't clear whether it was reportable"? Actually, it was simply reportable--you were charged whether the charges end up getting dismissed or not. And I think FINRA is going to sanction your firm, too. Words like "dismissed" and "expunged" don't matter to FINRA. The question asks if you have been charged with a felony. Only one truthful answer to that question: yes.
    THEN, you add the disclosure reporting pages (DRPs). Can't believe your firm dropped the ball here--they apparently like to play fast and loose with the truth, seeing what they can hide and what they won't be able to hide from FINRA. I'm pretty sure FINRA is going to fine them over this, maybe discipline a particular principal at the firm.
    For your situation, I'd say you have some high hurdles to clear. It's a recent felony, and then in FINRA's view the U-4 was completed dishonestly. Nothing is automatic in this process. You probably have a chance, especially if broker-dealers go on a hiring spree. But you are definitely in a difficult spot. Disclose EVERYTHING to FINRA and cooperate fully. Good luck to you. Oh yeah, and in case you haven't heard, cocaine is like really bad for you. Even young folks have been known to drop dead after what looks like a mild night of partying. Flush that stuff permanently, my friend. Not that you asked for my opinion on that note.

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  61. I was sponsored by my former employer Wells Fargo for my Series 6/63, I disclosed I had a petty theft charge from 12 years ago that I had expunged on my U4, and Wells Fargo used that information to terminate me. Does this leave me unable to work in the securities industry period?

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  62. The statutory disqualification generally only covers the previous 10 years. Sounds like a company policy for Wells Fargo, which is a subsidiary of a bank. Other broker-dealers might overlook a charge from more than 10 years ago--was there a conviction, or just a charge?

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  63. Thank you for your informative and very helpful previous responses. I am still a bit unclear about how to handle my own particular situation. 11 years ago I was arrested for retail theft, I did not conduct the theft but I was with friend who stole CDs. The charge was "stricken off" and there were no fines, supervision, etc. I had to disclose this on my U-4 and was very surprised that it even came up as I had completely forgotten it occurred!

    I am in the process of expunging this record and want to eliminate the record at FINRA so that I do not look like a crook to someone using BrokerCheck! My question is can I amend the U-4 in order to eliminate this record after the arrest is successfully expunged? I am hoping that since it is over 10 years old and expunged that it would be possible to remove it.

    Thanks in advance for any help it is much appreciated!!

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  64. I'm not a lawyer, but it is my understanding that terms such as "expunged" or "stricken off" are not recognized by FINRA. U-4 asks if you have ever been charged with a misdemeanor including theft--yes or no. Isn't the only truthful answer, "yes"? I don't see how that answer could become a "no." Of course, you can answer "no" when asked if you were ever convicted. Unfortunately, it would be hard to find a real-world example, but I'm thinking that what you indicate on your DRPs (disclosure reporting pages) will also show up in BrokerCheck. What you might try is this--go to www.finra.org and look up recent disciplinary actions. Then, see how those individuals appear within broker-check--how much detail is provided? I'll do this myself, too. Truthfully, many of these questions are way beyond the scope of the test, so I'm still learning how to apply all this to the "real world." Thanks.

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  65. For example, I just went to www.finra.org and looked up disciplinary actions. I chose April 2010 and happened to look up James Francis Cottrell in broker-check. His situation is different, but you can see how detailed the broker check report is. He failed to disclose material info on U-4.

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  66. I wrote an explanation and it shows up on BrokerCheck but the problem is that there is a glaring "Criminal" disclosure and the details "Retail Theft" on the first page. Only after you dig deeper into the report do you find my explanation on the DRP of the incident. It seems very unfair as most would not take the time to see the disclosure and regardless the plastering of the charge on the initial page really leaves a terrible impression to those who would see it.

    It was my understanding that by having a charge expunged that you are basically eradicating the evidence of the charge. I was told that it is like it never happened in the eyes of the law and in how you would respond to a question of whether you have been charged of a crime. I was thinking that once it has been deleted in the eyes of the law and court that it should consequently be deleted in the eyes of FINRA.

    I called FINRA today and they told me to speak with my compliance department. I have yet to speak with them but the impression that I received from the FINRA representative was that there may be a chance that I can change my filing with them but only through my broker/dealer.

    I will follow up down the road when I take the steps to attempt to amend my U-4 and let you know what I find.

    Thanks again for your insights!

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  67. Please let me know how this shakes out. It is my understanding that having something expunged would affect only a criminal case--sentencing, for example, as the individual would have no priors or would not be in a "three strikes--you're out" situation based on the expunged item. I don't think it means anything to FINRA. If it does, I will have some good news for a lot of people--this blog post is, by far, the one that has received the most feedback.

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  68. I also have a very similar situation to the person above. I'm a registered rep and I was charged with felony burglary about a year ago. It was a completely false charge due to some strange circumstances (a real honest to goodness conspiracy), and eventually the charge was dismissed. I did not plead guilty to a lesser charge either. I disclosed everything to my firm and FINRA, of course, and thankfully my firm retained me after the facts came to light. However, I had some trouble after applying for and getting a new job...WITHIN THE SAME FIRM! They went through an entire investigation, apparently because I would be technically registered under a different broker/dealer within the company. Everything is fine now, but I'm concerned about my future prospects when I eventually leave the firm. I know you've addressed different iterations of this same question, but would you think this would prevent other financial firms from hiring me? Is it worth pursuing an expungement? I have no other incidents on my record...this was my first run in with the law. Thank you very much in advance!

    ReplyDelete
  69. I guess FINRA can look as stupid as any other bureaucracy, huh? WTF? Ask an attorney with a specialization in this field, but I don't think "expungement" makes any difference. You were charged with a felony. I think FINRA expects you to explain what happened, knowing that this will go on broker-check. Then again, I doubt that many investors use broker check. Do Americans do a lot of fact checking in general?

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  70. R. Walker,

    I feel that the fact that companies can use a charge against you even though it was dismissed or you were found not guilty is presumptuous. We live in America where you are innocent until proven guilty, but when you go to FINRA or a firm, they believe your guilty no matter what. I think it is unfair for charges that did not result in convictions to be disclosed.

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  71. I hear you, but "innocent until proven guilty" applies to criminal cases. When joining an elite industry group, that industry has the ability to set the standards . . . as long as they don't discriminate by race/religion/gender, etc., they can keep doing what they're doing. Also, a "charge" would not keep someone out of the business--it would just be an awkward fact on broker check.

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  72. Lets see if you have any advise for this - Currently charged with felony terroristic threat, (Which if you research I have found can mean a lot of things, including this stupid scneario I find myself in) - Been offered deal of getting it reduced to gross misdemeanor. I'm strongly considering taking it, because it would be a misdemeanor not reportable on U4, but since it started as a Felony, and has already been reported as a 'charge' could it still get me disqualified? I am currently licensed and in good standing, no other record at all, good credit everything top notch.

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  73. A "charge" is not a disqualification, just something that must be disclosed. You're right--a non-securities related misdemeanor is not disclosed on U-4. I think you should get a good attorney here and find out all implications for having the word "terroristic" attached in any way. After all, Sara Palin could hypothetically end up in the White House.

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  74. Hi,

    I recently got a job in finance and am filling out the U-4. 4 years ago I was charged with misdemeanor of petty theft. However, after a successful probation, it was reduced to infraction of trespassing. My question is am I suppose to disclose this? I really don't want to jepordize this opportunity and would like to know how I should approach it. Thank you.

    ReplyDelete
  75. Thanks. Answer the question truthfully. Have you ever been charged with a misdemeanor specified in 14B(1)(a)?
    Yes.
    Then, you'll explain the situtation on a "DRP," or "disclosure reporting page."

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  76. Mr. Walker,

    I am currently series 7, 66 and insurance licensed in Ca. I am a financial advisor and recently recieved a judgement for 7k against me from an unpaid loan. I am on a payment plan with the company to resolve this issue.

    My questions are: Do I update my u4 and come clean? Will the firm fire me, will finra suspend my licenses? If I keep quite will my firm or finra ever know? Do they perform random background checks on me? I want to cone clean but don't want to Lose my job. This is a tough industry. Thank you, your site is great and helpful.

    Di I update my u4 and risk losing my job? Would I even Lise my job if I was honest and forthcoming about this?

    R do I not update my u4 and not tell anyone and handle it it myself? Would finra even finding or my employer find out?

    This site is great and appreciate the feedback.

    Thank you

    ReplyDelete
  77. Thanks. From what I can tell as a non-lawyer, you do need to update your response to question 14K and/or 14M, since the unpaid loan is either a compromise with creditors or an unsatisfied judgment--your compliance officer can help here. FINRA has told me that "yes" answers here do not equal statutory disqualification (unlike "yes" answers to most of the other disclosure questions).

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  78. I have a similar but seemingly milder version to other posts. My brother, as I understand it, was working for one bank as basically an entry level banker. He moved money from his fiance's acct to his. He immediately realized he should have had somone else do this and reported to his supervisor what he had done. Never the less, he was fired. He since has a similar job at another bank and doing well. He was being sponsored to take the series 7 and was told the application was denied because his last employer had done something to effectively blackball him. Is there any appeal type process? How long would this "blocking" exist? I tried to call SEC but that is a collection of voice mails and not holding my breath.

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  79. I did an FBI background check with my fingerprints and everything directly through the FBI, nothing showed up concerning a theft charge that was dismissed. If this is the primary way that they obtain their background check does that mean im in the clear?

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  80. Item 14K on the U-4 Form covers the past 10 years, so the disclosure will be there for a while. I would not expect a lot of clients to use brokercheck, though, and the few who do would probably sympathize with someone who had problems with creditors at one point. The form requires you to add a DRP for any "yes" answer. Not sure the compliance department is correct--sounds like they wanted to make you feel stupid for doing the right thing, which says a lot about them, actually. Item 14M asks if you have any "unsatisfied judgments against you." Did the compliance people mention anything about that? Couldn't a creditor get a judgment against somebody who refuses to pay? If you get an attorney, please let me know what he/she says about what the "compliance" folks told you. Does FINRA really want registered people to blow off creditors, punishing only those who were ethical enough to pay their debts? If so, the industry is in more trouble than I realized in terms of the whole ethics thing.

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  81. I have been in the securities industry for over 10 years registered with finra and others holding a series 7. No complaints during this period.
    When I initially registered 10+ years age I answered yes on the question regarding "have you ever had a license revoked". 17 years ago while acting as an insurance agent my license was revoked for 2 years.
    Since then I have re obtained that license in my home state, FLorida.
    Recently I changed broker/dealers and FINRA has decided to relook at my record under the statutory disqualification excuse. My new BD feels there won't be a problem but informed me that this process takes up to 4 weeks. This hardly seems like "fair dealing" or anything of the sort. Your thought and ideas would be appreciated.

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  82. Sounds very frustrating, but my FINRA can do what they want, basically, to protect investors and regulate the industry. This isn't the criminal court system, so you don't have a lot of "rights." You have responsibilities, and you may be granted the privilege to work in the industry--or not. FINRA can look into any red flag that an applicant has on his U-4 or U-5. I think your new BD is right, though--it would be shocking if this caused a problem for you beyond the inconvenience of not knowing the outcome for 4 weeks or so.

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  83. I was charged with felony fleeing and eluding the police in a motor vehicle 3yrs ago and the charge was ammended to a misdeamenor. Will this hurt my chances of working for a broker dealer? I have no additional issues prior to.

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  84. You'll have to disclose the felony charge. You have no felony convictions and no misdemeanor convictions related to "securities." I don't see why you couldn't get registered.

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  85. I've heard the Series 7 exam is no longer a requirement to work at an IBank/broker dealer

    As of October 15th 2010 the series 79 is more applicable to the job..correct? Also, with respect to the U4 and your previous response to the felony fleeing and eluding charge that was ammended will the sponsoring firm be made aware the applicant has been charged even though this individual has no felony convictions and no misdemeanor convictions?

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  86. The Series 79 is specifically for "investment banking," while the Series 7 qualifies a rep to work in investment banking or as a traditional "stock broker." Sponsoring firms will be made aware of a felony charge because the applicant will have to disclose it on the U-4. Can't imagine having a career predicated on a lie I'm hoping my employer never discovers.

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  87. i have a friend who got convicted of a dui felony- involuntary vehicular manslaughter without negligence. the situation was truly an accident. he was employed at a large investment banking firm and resigned before he went in to serve his time. he will be out soon. he has no other prior records and has a great reputation as an investment banker. there were people who tried to keep a place for him at his firm. do you think it would be possible for him to attain his series 7 again? i have been told that one can sit for the test with a sponsor. how often does this happen? would be need to be done with parole to even consider this as an option? or as long as he finds a sponsoring company, would it be a possibility to regain his series 7? what kind of requirements are there for the sponsoring company? would a new firm that has been opened for approx 3-4 yrs in good situation be able to sponsor someone with a felony?

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  88. Ouch. You're talking about a felony conviction. Generally, that will keep somebody out of the business for 10 years under "statutory disqualification." It doesn't matter who the firm is, whether they've been in business 3 years or 30 years--it's up to FINRA and the state securities regulator(s) to grant or deny the registration. If a firm thinks they can get him registered in spite of a felony conviction, they're free to try. But I doubt he'll be able to get in the business for at least 10 years after this felony conviction.

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  89. Are Dui's which are considered misdemeaners in New Jersey considered misdemeaners in New York State, which would affect my ability to get the Series 7 license in New York? I've heard they upgraded them to felonies in New York.

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  90. Don't think it matters. If you were charged or convicted of misdemeanor DUI, you can truthfully answer "no" to the question about securities-related misdemeanors. You or your friend weren't prosecuted by the State of New York. If NY had charged or convicted someone of FELONY DUI, that would be different. Of course, I'm not an attorney, but I can't imagine how else FINRA would expect someone to answer that question on U-4. If you weren't convicted of a felony, and if the misdemeanor has nothing to do with "securities," the truthful answers seem to be "no." Which is good--"yes" answers to Item 14 are never good answers. ;)

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  91. Hi, when I was 17 I was arrested for 6th degree larceny for stealing a plastic bracelet at a store worth less than $10. The case was dismissed and marked deleted on my file. The judge told me I did not have to disclose my arrest going forward. I took and passed my series exams while working for an investment bank but FINRA has not accepted my license and is asking for documentation surrounding my case. I am cooperating with them and my compliance department but am incredibly nervous that they are going to flat out deny my registration. Since I was never convicted and it was a low amount, youthful offender case, what are the chances that they will allow me to have a license? Thank you for any light you can shed on this for me.

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  92. I co signed on a loan with my now ex wife 3 years ago,well it is now a judgement against me. I am trying to get on with a paricular firm, will this hurt my chances of working with this broker dealer? Is this gonna affect my U-4 as well
    ?

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  93. Thank you in advance for your expertise. I was arrested for a drunken bar brawl in nj in 6/03. I beleive I plead out to a misdemeanor disorderly persons in municipal court. I filled out my U4 today because I'm sitting next friday for the 6.
    I said no to any felonies or misdemeanors. I beleive I'm right, This is also my second job since this offense, so my current employer ran a criminal background (last month)as did my previous employer. I'm just very nervous this will pop up. I've never gotten a parking ticket since the offense. Will FINRA dig this up? It's been tough to study, thinking my families food may be taken off the table.

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  94. I'm not an attorney and have never played one on TV. But, an arrest is not the same thing as a "charge." Were you charged with a felony? That seems to be the only relevant question. If you were charged with a felony, the answer to that question was "yes." If you were only charged with a misdemeanor, the answer to all the questions was "no." FINRA definitely does some digging, as does the state securities regulators in your state.

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  95. Re: I co signed on a loan with my now ex wife 3 years ago,well it is now a judgement against me. I am trying to get on with a paricular firm, will this hurt my chances of working with this broker dealer? Is this gonna affect my U-4 as well
    RESPONSE: First, blogspot is good, but it makes replying to comments very tricky. I wanted to reply to the one just after yours and then, well . . . anyway: You will disclose this on U-4. I doubt it would be a deal-breaker for a firm who wants to hire you, and it does not lead to statutory disqualification by FINRA.

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  96. Hello! I'm in the process of trying to be registered and have a 14-year old record of a dismissed misdemeanor charge of "theft of services" from passing out drunk in a taxi - the cab driver dropped me off at the police station. This was a college-aged indiscretion, was intoxicated. Is this going to be a major obstacle for me?
    Many thanks! I though the U-4 misdemeanor disclosures were only for investment-related offenses but this came up.

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  97. It will be an obstacle, probably not a deal-breaker. You'll have to answer YES when asked if you have EVER been charged with a misdemeanor involving: investments or an investment-related business or any fraud, false statements or omissions, wrongful taking of property, bribery, perjury, forgery, counterfeiting, extortion, or a conspiracy to commit any of these offenses?
    Theft is a major red flag in this industry, whether it's shoplifting or theft of services. You'll have to explain the situation on the DRPs (disclosure reporting pages). I would be surprised if this kept you from getting registered . . . but I can tell you for sure that if you answer "no" to that question and FINRA finds out, your career will be over.

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  98. Thank you for all this information. It's really useful.
    I'm currently working for a firm as a trainee and looking at taking the series test. But I'm uncertain how the firm and FINRA will look at this.

    I previously worked at a mortgage company. Both the company and I are currently in a law suit for contract fraud on a home loan with another mortgage lender. This is held in a civil court and not criminal. If we loose then I will likely have a judgement for damages claimed in the fraud suit. I know if I get a judgement then it will have to be disclosed in the U-4 form and it doesn't automatically disqualify me. But how will they look at the law suit case of contract fraud on a mortgage loan?

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  99. The word "fraud" is the ultimate red-flag word. Pull up a U-4 form. Item 14H.2. is called "Civil Judicial Disclosure, asking: "Are you named in any pending investment-related civil action that could result in a "yes" answer to 14H.1., which is: Has any domestic or foreign court ever:
    (a) enjoined you in connection with any investment-related activity?
    (b) found that you were involved in a violation of any investment-related statute or regulation(s)?
    The next item is 14L.1. which says: Have you ever been named as a respondent/defendant in an investment-related, consumer-initiated
    arbitration or civil litigation which alleged that you were involved in one or more sales practice violations
    and which: is still pending, resulted in a judgment against you (regardless of amount)or was settled for $10,000 or more?
    I think you should talk to an attorney with experience in this area. I see many red flags here. If the case is dismissed or withdrawn, then things would look much different. BTW, "investment-related" is very broad, defined as "Pertains to securities, commodities, banking, insurance, or real estate."

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  100. In 2007, I had an argument with my now ex-wife and took her cell phone and left the house. The police showed up and arrested me and I was charged with theft. I did a plea in abeyance and the charges were later dismissed as a result of the plea in abeyance. Do I need to answer yes to both 14b 1 and 2 or just 2?

    ReplyDelete
  101. Although I'm not a lawyer, it seems clear that you'll have to answer "yes" to both 14.B.1a and 14.B.1b. According to www.uslegal.com a plea of abeyance is a guilty plea: When you enter into a plea in abeyance agreement, you will have to sign a document that states you are giving up your constitutional rights to a trial and are entering a guilty or no contest plea.

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  102. So am I screwed? I have a job offer from MSSB

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  103. No one can make that call. I take it MSSB doesn't know your answers to U-4 yet? I know this--the WORST thing you could do is to give a false "no" answer to these questions. I've seen many agents lose their license when the state or FINRA founds out the truth. For every "yes" answer, you provide your "side of the story." Pull up a U-4 and look at what's involved on the "DRP" or "disclosure reporting pages." I would think that stealing from a store or even jumping out of a cab without paying might look worse than this--in a domestic dispute, people do things they wouldn't normally do. They're human beings--they really take things on a case-by-case basis at FINRA. The firms have to decide their own hiring policies. Some are more pristine and button-down than others. Try registeredrep.com and post a question. The people in the business would know more about how firms go about hiring people. I just help people clear the first big hurdle--the Series 7. I do not think "you're screwed" is accurate.

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  104. I have a felony conviction from 1989 for theft. I was unfortunately 18 at the time. I am currently a returning student finishing a finance degree. Is the theft felony an automatic deal breaker for getting a series 7 or is there some chance since it was over 20 years ago.

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  105. If it happened over 10 years ago, there is a chance. It's a major red flag, but FINRA and the state regulators will consider that it was over 20 years ago--if your adult life has no other red flags, you could be granted a license. You may find the hardest obstacle to clear is the broker-dealer firms--will they hire anyone with "theft" disclosed on the U-4.

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  106. somebody else asked: I am a broker and currently under internal investigation for forgery. The forgery was with my business partner who would not sue me, but the broker dealer I work for currently states that I violated policy. Is the Internal investigation going to end the case or does the company have to report to FINRA or any other law division? I am not really worried about not working in the industry, just not wanting jail.

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  107. I'm not a criminal attorney, and I'm not sure I could predict the outcome even if I were. If it wasn't a huge amount of $, jail time seems unlikely. It's probably good that you're not worried about working in the industry--forgery is a major red flag, as there are so many documents that could be forged in the securities industry to the detriment of the client.

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  108. Is there a way to check if you've passed FINRA background check online or anything? I've submitted my U-4 (disclosing misdemeanor of petty theft which has been reduced to infraction of trespassing, happened 3 years ago) a month ago..and I haven't heard anything from FINRA or my firm. I actually received my signing bonus too..so I'm not sure what to expect because my start date is July 2011. Thank you.

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  109. I don't think you can check that online. Did you try to brokercheck yourself at www.finra.org? It seems that your firm is confident your registration will be granted; otherwise, why cut the check? The word "theft" is a major red flag on a U-4. They'll probably take their time going through the case.

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  110. What about a felony sex offense and obtaining various financial licenses? Not money related but crime of moral turpitude.

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  111. Any felony has to be disclosed on U-4. If it happened in the past 10 years, it's going to cause problems. Typically, crimes involving dishonesty and/or money are the big red flags. Aside from FINRA, the broker-dealer has to decide to hire you. Often, that's the tough part. A good place for your question might be a community of registered reps--see registeredrep dot com

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  112. I have three alcohol-related misdemeanors that popped up on my FBI background check. Nothing securities related. FINRA has requested the arrest narratives, conviction notices, and final dispositions. One DUI and two vandalism charges. I feel fine about disclosing everything but the arrest narratives. They make me look like a raging lunatic. Who has the rights to see these? My sponsor, compliance officer, and FINRA? All of them? Thanks!

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  113. I'm not sure it matters--if FINRA requests the arrest narratives, you have two options: 1) comply or 2) start a career outside the brokerage industry. I don't know if your firm sees the arrest narratives or not, and I'm not sure how to verify that. But, again, if FINRA asks for documents, you have no choice but to comply . . . or find a job outside the brokerage industry.

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  114. I got a dui when I was 17. I lost my drivers license and since that time 7 years ago I have been cought driving on a dui suspended license 3 times can I get a seris 7 license?

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  115. The three times part is troubling--it signifies a willful disregard for authority and for the law. Were any of these felony charges? Felony convictions? The problem is, you need a license from a state licensing authority, which is probably the same office that grants drivers licenses.

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  116. I have two questions:
    First, when I was 19 I was charged with possession of a fraudulent ID (a misdemeanor), found in my lost wallet that a good Samaritan turned into the police station. The charged was dismissed and I was not required to do any community service or pay any fines. Does this need to be reported on the U-4 since I was charged?

    Second, I was arrested for underage drinking (misdemeanor) and had the charge expunged. FINRA knows about the charge and is requesting additional information showing that it is, in fact, a misdemeanor. Unfortunately the court shreds all documents related to expunged charges, and I have nothing definitively saying that it was a misdemeanor, only that it was underage possession. What should I do?

    Thanks very much for your help

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  117. The first question is easy. Here is what U-4 asks: Have you ever been convicted/charged of . . . a misdemeanor involving: investments or an investment-related business or any fraud . . . The phrase "any fraud" looks like you need to answer "yes," to being charged, right? Have you asked the courts if they can issue a brief statement to back you up? So, FINRA knows nothing about the fake ID?

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  118. FINRA knows about the fake ID, but my broker/dealer is skeptical whether or not I will actually be required to change my answer to "Yes", after submitting documentation requested by FINRA. On the other charge, the court is unwilling to submit any documents saying that they have no record of my arrest or whether it was a misdemeanor. My lawyer did provide me with the number of the legal statute that shows any underage drinking is a misdemeanor in Tennessee. I'm not sure if that's enough though.
    What are the ramifications to answering "Yes" to being charged and not convicted of fraud, from FINRA and the rest of the industry?

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  119. I think you're lawyer is on the right track--if all underage drinking is a misdemeanor in TN, FINRA can either accept that or expose themselves to be even dumber than anyone imagined. Let's hope your B/D is right--I've never seen a good outcome when FINRA or the state regulator thinks the U-4 has a false statement on it. It's a game-ender.

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  120. sorry--"your lawyer" is what I meant to type.

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  121. I agree. I will definitely submit a corrected U-4 if FINRA deems the documentation that I just submitted to be insufficient to prevent a "Yes" answer on the form. If I do end up changing the answer to "Yes" on the form, will that put me at a competitive disadvantage when I apply for future finance jobs or attempt to build a client base? Basically I'm just trying to figure out how big of a deal it is to have a question of the form marked Yes. Thanks

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  122. Yes answers are definitely a red flag, but that's not the same thing as a game-ender. The game/career-ender is the U-4 that was submitted with a "no" answer when the answer was actually "yes." I've seen many state regulators revoke licenses over that.

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  123. 2 questions:

    Can an MBA candidate get licensed in Texas with a misdemeanor theft that completed deferred adjudication,case was dismissed and discharged,no conviction,and record sealed.Candidate has an MBA in finance.what are the chances?

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  124. I'm not sure what the MBA has to do with getting licensed as a stock broker . . . ?
    You'd have to answer "yes" that you were charged with misdemeanor theft and then explain the story to FINRA. Is that what you're asking?

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  125. Is it beneficial to the applicant if the the theft offense was dismissed and discharged,not convicted,and sealed? Does this increase the chances? Does the fact that the applicant has an MBA influence? even if it was the only offense in their record..and it was 4 years ago? or are they banned for life from working in the securities industry? what specifically do they look for when weighing in the fitness of character vs professional/educational achievements? thanks!

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  126. A conviction for theft is definitely a worse red flag than a charge of theft--was it misdemeanor or felony, btw? I don't see how the MBA would have a lot of influence; the license exam is all the proof of competency that FINRA needs to see. Being well-educated would not outweigh theft in their eyes, from what I've been able to gather as a non-lawyer. Regulators "consider all the relevant facts of the case," and that's about as specific as they (or anyone) could be about your chances. The facts you mention are relevant--only offense, the case was dismissed. A conviction usually only keeps someone out for 10 years, and you weren't convicted. I think you have a shot. The bigger obstacle might be in trying to get hired by a broker-dealer . . ?

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  127. Hello. I plead guilty 12 yrs ago to a misdemeanor shoplifting charge. Will I be able to take the series 7 and 66? my employer said I may have to be fingerprinted and also give them my social sec. #. Not sure if they can find that out abour me or not since it was 12 yrs ago. Thanks.

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  128. Hi. Everyone gets fingerprinted in connection to taking the Series 7 and associating with a broker-dealer, and everyone taking any of these exams gives the ss number. You will be asked if you have EVER pled guilty to a misdemeanor involving wrongful taking of property. The answer is YES. Then, you'll have to give your side of the story through "drp" or "disclosure reporting pages" of the U-4. They can and will find out about the shoplifting, no matter how you answer the U-4 questions. Anyone who gives a false "no" answer on U-4 is done/game-over in the industry.

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  129. since it happend more than 10 years ago, FINRA should grant your registration, and so should your state securities regulator.

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  130. Hi again. Thanks for your fast response. Another question - lets say I get this expunged tomorrow. Do I still have to answer "yes"? And I guess there are 2 questions related to this, correct? # 1 asking have you ever been charged with a misdemeanor and #2 have you ever been convicted? thanks!

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  131. If you pled guilty to the misdemeanor involving wrongful taking of property, you're exactly right--two "yes" answers. The "expunged" part is simply part of your narrative on the disclosure reporting pages. They'll make you jump through some hoops, but their statutory disqualification generally only keeps people out based on what happened in the previous 10 years. Also, there is FINRA, and then there is your state securities department. Luckily, they're usually on the same page.

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  132. sorry if this is coming thru twice, not sure if the last one posted? Anyways...so what is the point of expunging it if I still have to answer yes?? I heard that when you take the 7, you find out that day, right then and there, if you passed or failed. Since I have to answer "yes" to those 2 questions, will I not find out if I passed or failed that day? If not, than my employer will find all this out, right? thanks!!

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  133. I think you're combining two different things--taking an exam and getting your registration granted. Whenever you take an exam, you know if you passed/failed in a few seconds. You have to answer "yes" to both questions because those are true answers. The fact that something was expunged is probably a relevant, mitigating factor to FINRA and your state regulator. It doesn't mean you tell FINRA and the state that something didn't happen because they might not be able to prove otherwise. Always be honest and cooperative with the regulators; it's your only good option.

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  134. In other words, you don't get your registration granted at the testing center--you simply take the test there. for example, you could self-sponsor for the series 66 with a U-10 form, pass that test, then have your registration rejected by your state regulator. two different things.

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  135. thank you for all your help!! Basically what I am getting out of all this is #1 to be honest and #2 since it was 12 yrs ago, I should be ok. I hope!!

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  136. question. do you fill out that U-4 form the day of the exam or beforehand? thank you!!

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  137. generally, the firm has you fill out the U-4 and submits it before you take the test.

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  138. RE:(MBA guy)It was a Misdemeanor.Never been in trouble with the law and due to poor counseling entered a guilty plea and deferred adjudication plea bargain.The outcome of the case was dismissed,discharged,and sealed. The problem is that in Texas,state licensing regulators have access to this information.I am thinking whether to make a career change or to weigh in my chances of working in the securities industry. Do I have realistic expectations to advance in the securities industry? Do you know of any cases similar to this one? what has been the outcome?

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  139. Pretty sure all state regulators have access to court records. If the theft had occured more than 10 years ago, I would be very confident that you could get licensed. It's still not impossible, especially if you can truthfully answer "no" to both felony questions and the convicted/pled guilty question about misdemeanors involving theft. I'm not sure how I would be able to run a search for similar cases--if I find way, I'll let you know. Might be worth paying a lawyer in this area for a few hours of counseling--the career can be very lucrative.

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  140. Hi, I posted a question before regarding a 3 year old misdemeanor petty theft charge which has been reduced to infraction of trespassing. I've submitted the U-4 form about 2 months ago along with a court doc showing the reduction in charge, but I have yet to hear from my firm or FINRA. And it's killing not knowing if I'm safe or not. Should I call the compliance department and ask what's going on? or it is better that I just sit and wait? Thank you

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  141. The time stamp on your comment indicates that it's keeping you up at night, which I can definitely understand. I don't see how you could hurt yourself by contacting the compliance department. I also doubt they'll have anything definitive to tell you. FINRA is never in a hurry in these cases.

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  142. This is not directly related to FINRA but I am applying for a position in the banking industry and I have a petty larcency charge from 1996. I recently had my fingerprints done and I have been searching all over to determine if this will cause the bank to take the offer back. However, its been over 10 years and when asked if I had ever been convicted of a crime that involved a breach of trust or dishonesty I answered yes and put the information down. With it being over 10 years ago and being honest on my background check should I be so worried?

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  143. I don't know the banking industry well enough to say for sure. I think it will depend on what your employer wants to do as opposed to what the banking regulations say. Larceny is a major red flag for all financial services jobs. Good think it wasn't a felony.

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  144. Hey Passed the 7 @ 20N Clark St tonight because of your book!!!!!!!!

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  145. Hi. I got an minor in possession of alcohol that is only a misdemeanor in Missouri. The record is now seal because I completed probation 4 years ago. Should I disclose this on the U-4 form? Will this hurt my chances with the FINRA? Will they want me to tell them what happened?

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  146. the misdemeanors that have to be disclosed involve things like: counterfeiting, forgery, fraud, theft, extortion, perjury . . . crimes involving money and/or dishonesty. FINRA might find out about the misdemeanor, but there's nothing to disclose on U-4. If it were a felony, that would be different.

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  147. Do you think the FINRA will accept my application?

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  148. Yes. I would be shocked if they didn't. I think they will probably sweat you a little bit, like any exclusive fraternity.

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  149. thank you for your help, I just got offer a training position to become a bond trader and I really want this job...So once they check my back ground, they will probably want me to show them that I didn't lie to them on the U-4 by showing them my record. And then they will decide to accept me or not? Do you have any idea how long this could take?

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  150. I would guess it should be wrapped up by end of January.

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  151. Ok. Recently I was detained by us customs in Texas because a group of us were traveling to go party in San Antonio TX. We unfortunately found out that one person traveling with us was here illegally. They determined that's I was completely unaware of the situation and released me immediately afternoon fingerprinting me. They told me their would be no court and that it would go on my background as an arrest. I've recently reported this within 30 days to my employer and i am getting documentation on the situation from us customs. Will this cause me to lose my licenses?

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  152. I'm not a criminal lawyer, but I think I can say this: an "arrest" is just a situation where you're handcuffed and hauled in, or even if you reasonably believe that the police will not let you go. The U4 asks if you have been CHARGED or CONVICTED/pled no contest. Were you ever CHARGED with a felony?

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  153. No I was not. They just put me in a holding cell Ford a bit. They did take my fingerprints. They told me that I wouldn't go to court for anything, just that it would go on my background.

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  154. so, it looks like there's nothing to disclose on U-4. You weren't charged or convicted of a felony or any "securities-related" misdemeanor. FINRA might find out about the incident, but I don't see why you'd disclose it on U-4. Have you pulled up a U-4 Form to see how the questions are phrased?

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  155. question. im getting an 11 yr old shoplifting misdemeanor charge/pled guilty conviction off my record. it will be expunged. my attorney called the Gateway Call Center number on FINRA's website...it said to call there w/ any questions related to forms U4 and U5. anyways, they said I can anser NO to quest # 14, where is asks if you have ever been charged/convicted of a crime involving theft, etc, but I have to have the court expungement records on hand with my employer in case of anything. does that make sense?

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  156. i am filing my finra app. i had an arrest 26 years ago for theft or aiding and abetting (can't remember) but it was a buddy of mine that stole the money. He made a plea with them and made a story up that i helped him and when we went to court he perjured himself and they threw out the case. I never expunged it but have a letter that states i can have it expunged. This was handled in a local town court. would this show up and should I disclose it?

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  157. to be honest, I can learn from this case myself, so, please, let me know how it plays out. I was under the impression that even expunged convictions need to be disclosed, but I have to defer to your attorney. It was 11 years ago; that will be in your favor. Shoplifting, however, is definitely a red flag.

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  158. the above comment is for the 11-year-old shoplifting situation. THIS comment is to George (blogspot is VERY weird when it comes to commentary). Anyway: George, an "arrest" simply means you were taken into custody by police. Were you formally CHARGED or CONVICTED of anything? If so, disclose it. If not, you can answer "no," on U-4. However, FINRA and/or your state will likely find out about either way.

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  159. Charged with a possession of a controlled substance (felony). It was incredibly dumb of me and my only arrest ever.

    Plead no contest and entered a pre-trial diversionary program for a year and got the case dropped (nolle processed) so I was not convicted. Do you know if the no contest plea counts as a conviction? I could see the argument that yes it does but the end result is that the case was dropped and I'm getting it expunged from my criminal record without a conviction.

    It's on my U-4 and all and I have no problem explaining it and I've learned from a very stupid mistake and grown from it. I appreciate any insight that you can provide and have read all your posts, you are extremely helpful!

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  160. I don't think there's a formula where we can say that a no contest equals a conviction, but I assume that FINRA looks at them pretty much the same. Either way, it looks like a minor violation. Thanks for the good words.

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  161. Hello,

    I was recently arrested for Interfering with a Police Officer, a misdemeanor. Is that crime considered "dishonest" by Finra standards? Also, whats the time limit for having to disclose if you've been arrested/convicted? This occurred on 11/24 and my court date was pushed off. I only met with my lawyer today. My court date is 1/4 and my lawyer anticipates that I won't be convicted. Any help is appreciated.

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  162. the time frame for reporting felonies and securities-related misdemeanors on U4 is indefinitely/forever. But, this misdemeanor is not securities-related, so it doesn't go on U4. FINRA may still hassle you about it.

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  163. I was charged with a misdemeanor DUI. It was pled down and I was convicted of a misdemeanor wreckless operation of vehicle. Is that reported on U-4 or ADV?

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  164. that is not a misdemeanor related to securities. The misdemeanors that must be reported involve things like fraud, theft, shoplifting, extortion, counterfeiting, perjury, and forgery. Also, it would be somewhat ironic if a firm like, say, Merrill Lynch excluded somebody for "wreckless operation of a vehicle." Those geniuses could teach a seminar on wreckless operations of a formerly solvent broker-dealer.

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  165. Hi, i've read a number of your responses and some had small similarities but others didn't. Anyways, i'm hired at a firm in NJ and i'm about to hand in my U-4. I do have 2 felony convictions for resisting arrest and simple assault. i have the court sealed judgement of convictions ready but i also had another case prior to those which was a robbery charge that i was not convicted of but was amended to a petty disorder persons offense which is considered similar to a traffic offense. anyways i've heard of an m400 or something like that for supervised compliance and my sponsor said we'll give it a shot. do i still have to disclose the robbery charge even if it was ultimately dismissed and what do u think my chances are of getting licensed with the 2 felonies. i have also disclosed 6 recommmendation letter from a VP of goldman sachs and the Executives and legal liasons at the rehab center i attented with completed certificates. please get back to me soon...SHANE

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  166. Mr. Walker

    I just discovered your blog recently and found it to be very helpful, thanks for your posts. My question has to do with jobs in corporate finance. I have looked all over online and can't find an answer. Do jobs in a corporate finance departments require any type of finra registration? I had a misdemeanor conviction for theft about 8 years ago, and I am trying to get a feel for all my options.

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  167. Hi. I guess that depends on what the person is doing in the corporate finance department. I don't think many are trading securities, so there's probably no FINRA registration required. But I would expect most companies to ask about theft convictions, anyway. For FINRA registration, I would think you could get that granted after another 2 years or so (after 10 years), though that's not guaranteed.

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  168. @SHANE . . . I guess I still don't understand in which order blogspot publishes comments . . . anyway, U-4 asks the question this way: Have you ever been charged with a misdemeanor involving: investments or an investment-related business or any fraud, false statements or omissions, wrongful taking of property, bribery, perjury, forgery, counterfeiting, extortion, or a
    conspiracy to commit any of these offenses?

    I think "yes" is the only honest answer, right?
    I would say that if a broker-dealer knows about these incidents and is still willing to apply for your registration, that indicates you have a shot.

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  169. in fact, if it was a robbery charge, it was most likely a FELONY charge, right?

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  170. This past summer I plead no contest to misdemeanor posession of drug paraphernalia and misdemeanor public intoxication in Texas. I was just hired in ny and am getting ready for my 7. Should I be worried?

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  171. This comment has been removed by the author.

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  172. neither of those misdemeanors is disclosed on U4. FINRA and your state regulators might find out about the no contest pleas, and maybe ask you about them, but they're not the sort of misdemeanors that keep people from getting licensed. The misdemeanors that make people "statutorily disqualified" are things like: fraud, forgery, perjury, theft, extortion, counterfeiting, etc.

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  173. Hi, I was arrested for felony sale of a controlled substance in a night club by an undercover. Even though I was not the dealer (I introduced and handed off the drugs), I was arrested also. Given my clean record, my education / employment history, and volunteer work it’s likely that the case will be dropped to a violation which is sealed from my record. If there is not conviction, only and arrest record, can I still obtain finra licensing? Also, with my situation, will I be able to apply for other jobs for other banks. I’m still employed for the same bank as when I was arrested. Another side note, I never told them about the arrest even though in the employee hand book it said I had to.

    Thanks

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  174. Related question, I am looking to get registered in the all fifty states and territories, so I need some advice for the start of 2011:

    Has anyone with a bankruptcy (chapter 7) in his/her past ever had any trouble getting registered in the 50 states and US territories? I have been told that Michigan and Florida are very stringent, and that the "smaller" states will withhold one's registration if Michigan does not approve his\her securities license.


    How might student loans from my undergraduate and graduate degrees affect my registration?


    How might an average credit score affect my registration?



    Thanks!

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  175. Hi. Im about to turn in the u4 to be a wholesaler. I had a felony possession of controlled substance charge 4 years ago where it the judge gave me a suspended imposition of sentence. I completed my required probation and the arrest/charge has been dismissed. My lawyer told me that the records were officially sealed and I could therefore answer no to the u4 questions. I've been working for my company for 4 years and think I may have some goodwill in the bank. The incident happened while in college.I woulld like to get your thoughts. Do I need to disclose?

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  176. 1. Do you have to disclose juvenile records? and 2. Was convicted of conspiracy to commit assault. It was a felony and was convicted in 1999 (so 12 years ago) and completion of term (parole) in 2001 (so 10 years ago). Will this jeopardize my chances of obtaining a series license? Thanks.

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  177. Hello Mr. Walker:

    I am so glad I stumbled onto this site, and hope that you can help me! I am not trying to be a broker or taking any "tests"......I have an interview tomorrow at Morgan Stanley for an Executive Assistant position in California. Here is my concern.......I was convicted of bad check charges....about 28 years ago!! I have lived the life of an angel since then :) but am worried that it will come up in an FBI background check (I have passed other background checks....I'm a California Notary!)......I always check that I have not been convicted of a felony on applications because I think that the charges were to be dismissed after I completed probation. Do you think I should even bother going to the interview???

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  178. I'm not a criminal attorney, but I know there's a difference between an ARREST and a CHARGE. An arrest occurs whenever someone is detained by a police officer or even feels as if he can not freely leave the premises because the cop won't let him. Were you formally charged/indicted with a felony? If so, you have to answer "yes" to the question of whether you were ever charged with a felony.

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  179. once again, blogspot makes responding to multiple questions a nightmare. The last response was to the nightclub arrest. This one is for the credit/Michigan question: States can and do deny registration based on a student loan default. IL is one of them, too. Yes, a denial by one state is grounds for other states to deny. A bankruptcy disclosed on U-4 does not lead to statutory disqualification . . .but state law is state law. Have you read the Michigan statutes . . . should be on their website.

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  180. this response is to Kathie (I need to contact blogspot about their crazy comments process, sorry) . . . yes, go to the interview (you probably already did), but, yes, this must be disclosed and, yes, this will likely be a problem.

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  181. this response is to the wholesaler . . . yes, some lawyers like to lie (not sure why), but YOU need to tell FINRA and your state the truth. You were charged with a felony. Chances are, they will find out either way, so you should answer truthfully. This is not legal advice, but this is based on all I've read concerning FINRA's statutory disqualification. A woman in IL got the same bad advice, and IL took away her license permanently . . . based on something that happened 17 years earlier. She thought they wouldn't find out; she was wrong. Go to www.passthe63.com/enforcement and click on stephanieelliot

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  182. and this response is to the "juvenile records" question . . . First, you need to consult an attorney. I can probably say this much: you must disclose the felony charge and conviction. It likely will not prevent you from being accepted . . . but, on the flip side, if you answer "no" and they find out otherwise, game over.

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  183. Hi, I'm the one with the nightclub arrest. At this point in time I have not been indicted. My lawyer is trying to work out a resolution with the DA to avoid me getting indicted. The goal is to walk away with a violation which gets sealed from my record. So if that’s the case, all I would have is the arrest. I'm assuming what you are saying is that if they don’t indict me, that means I won't have formal charges and I won’t have to answer yes to the question “have you ever been charged with a felony?” Ideally, that will be my best result.
    But let’s say I do have to answer “yes” I’ve been charged. But the charges were dismissed. Is this something finra will most likely have leniency with given my otherwise stellar record, work history, educational history, and volunteering? Which are all very good.

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  184. I think FINRA will definitely show leniency if you answer YES, you were charged, but NO, you were not convicted of anything. Let me double-check the criminal law question you pose with some lawyers that I know (and a judge). Tons of lawyers in Chicago.

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  185. Hi, I have a murder conviction from 1990. I see here most people have various convictions but none so serious. Will they type of crime bar me forever or does the 10 years apply here as well?

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  186. Dear Mr. Walker,

    I was recently terminated from my firm for lack of following internal paperwork procedures. Currently the termination is being reviewed by FINRA. I owe a my old firm a portion of upfront money I received. I understand if I do not pay, FINRA can award the firm the money, however, if I do not pay Finra cannot revoke my 7....is this true? Thanks.

    Before this occurred I contacted FINRA the attorney stated if you do not win, we can disclose the judgement but cannot force you to pay.

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  187. Looks like the best approach is to see what happens before filling out the U4. If you are never formally charged, you can say "no." But, if you end up being indicted, after saying you were never charged, it will look dishonest--you knew you were arrested and probably going to be formerly charged. Also, the police might be able to charge you even though the DA hasn't gotten a formal charge via an indictment. it would look bad to be playing semantics with the lawyers/regulators at FINRA. The issue of 'sealed' and/or 'expunged' can be tricky. Make sure you get good legal advice there. In my discussion with the criminal attorney, a conviction can be expunged, which means it never happened, but you were still charged--meaning you'd have to answer "yes," there. I think that's why they ask the questions the way they do--even if a conviction was expunged, you were charged. I'm still verifying that last notion. Either way, FINRA and the state regulators expect people to be totally candid and forthright when answering these questions, as opposed to answering strategically.

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  188. my last response was actually to the nightclub arrest question. This response is to the next question, re: homicide. I have never pursued this topic, but I look forward to finding out what I can. I would not be surprised if armed robbery wasn't considered as much a red flag--or more so--as homicide. But, I don't know that. FINRA takes things on a case-by-case basis. I'll see what I can find out. I'm a big believer in the notion that after someone has done the time for the crime, he should get a second chance. Not sure if FINRA and the state securities regulators agree. Thanks for your interesting commentary here.

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  189. and this response is to the internal paperwork question--I will eventually figure out how to responde to multiple comments, I swear . . . okay, if FINRA says you have to pay your firm X dollars, I believe you have to do what you can to satisfy that award. And if you don't pay, why couldn't they revoke your license? The answer he gave you said they can't force you to pay . . . no, they can't. They're not a court of law. But, they can take away your license and say you can't register until you satisfy the "award." If this involves a lot of money, I think you should consult an attorney. In fact, no matter how much money this involves, consult an attorney. Knowledge would really be powerful in this situation.

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  190. I am a recent graduate in finance. I recieved DUI two years ago while still in college. Its the only thing I have on my record. Can I still get a series 7,6, or 66 licenses in the future?

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  191. DUIs are usually misdemeanors, unless it's a repeat offense or there were aggravating factors. Is it a misdemeanor? If so, it's not even disclosed on U4, although FINRA and/or your state regulator may still hassle you about it. Doesn't sound like you'd be disqualified, unless it was a felony.

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  192. not that felony DUI is an automatic disqualification. Ideally, of course, one would have zero felonies and zero securities-relevant misdmeanors on one's record, especially in the previous 10 years.

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  193. Dear Mr.Walker,

    I was recently terminated from my ex-employer due to not following company paperwork procedure when opening an (bank) account. This information was posted on my U4 recently (disclosure made about termination). I was wondering whether this should be disclosed at all on my U4, as I was only a bank employee who had licenses held by the same bank's BD. The termination had no connection whatsoever to brokerage activity or the securities industry, as it was a simple bank checking account deemed opened incorrectly.

    I was also wondering the extent to which this would affect my employment capability in a licensed capacity within the financial services industry.

    Thank you very much for your help, your insights are always very useful.

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  194. Dear Mr.Walker,

    I was recently terminated from the bank I worked in for failure to comply with procedure when opening a bank account. My U5 clearly states that the termination was related to a bank account (not BD), and that it was 'Not securities-related'.
    Item 14J on the U4 form (termination disclosure) refers to disclosure related to termination due to Violating investment-related statutes, regulations, rules, or industry standards of conduct.
    Since my termination was specific to bank procedures and wasn't securities related, should I answer 'Yes' on item 14J when entering employment with any other company? Or would 'No' be correct, since the reason for termination was strictly not securities related?
    Thank you

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  195. I was convicted for Petty Theft 5 years ago. That was the only misdemeanor I have and the record has been expunged before I employ with my current B/D firm 2 years ago so I did not disclose it on the application. From my understanding of expungement, I can legally check 'no' on applications when they ask if I was ever charged or convicted. The firm took my fingerprints and never came back and question. They are trying to sponsor me to take the series 7 exam now and I know I have to disclose on U4. What are the chances of me being disqualified by FINRA and/or the states? Should I disclose this to management prior to open window for the series exam?

    Thank you!

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  196. I think you need to consult an attorney. I'm still trying to nail down exactly how to answer the question if a conviction has been expunged. One attorney and I came to a loose conclusion that your CONVICTION might have been expunged, but you were still CHARGED with a securities-related misdemeanor. In fact, this seems to be the regulators' strategy behind phrasing the questions this way . . . so that even if something is expunged, the individual has to say "yes," he was charged with a crime. These legal questions are a little beyond me--I know how to prepare people for test questions. If you do consult an attorney , please let me know what you find out.

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  197. this comment is to the former bank employee--it took a lot of clicks, but this is what I've found. 14J asks:
    Have you ever voluntarily resigned, been discharged or permitted to resign after allegations were made that accused you of:
    14J.
    (1) violating investment-related statutes, regulations, rules, or industry standards of conduct?
    THIS is how they define "investment-related statutes" . . . Pertains to securities, commodities, banking, insurance, or real estate (including, but not limited to, acting as or being associated with a broker-dealer, issuer, investment company, investment adviser, futures sponsor, bank, or savings association).

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  198. the comment above is for BOTH former bank employees. I can't guess (and no one can) how these things will affect your chances of getting registered. Neither case is an automatic deal-breaker from what I can tell.

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  199. I was terminated by my B/D for signing a client's name on a form. Finra only gave me a Cautionary Action Letter which isn't disclosable on U4, but the State, under an Admin Consent Order, barred me for 2 years from any association or employment with a B/D or Investment Adviser. Is this a deal-breaker for returning to the industry in any aspect where registration is required? (Either as an advisor, assistant, operations, compliance, etc)

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  200. Nothing is absolute here--you'll have to disclose the state's action on U4. You'll have to explain what happened. If you're a good salesperson, I don't see why you can't get back in the industry.

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