Wednesday, February 2, 2011

Can I get registered with FINRA if I have a felony conviction?

So, the post called "felonies and FINRA registration" has now grown to about 215 comments (half of them mine, of course). Who knew it was such a hot topic? Let's see what FINRA has to say about some of the quesitons I've been receiving.

Q: if a registered person is arrested but not charged with a crime, is the arrest required to be reported?
A: No. An arrest without a charge is not required to be reported.

Q: if a registered person is convicted of a crime and later pardoned, must the conviction continue to be reported? What if the conviction is set aside?
A: A person convicted of a crime and subsequently pardoned must continue to report the conviction. A pardon releases an individual from the punishment of the crime, but does not remove the conviction.

So, that comes close--but not quite--to answering the questions I keep getting from guys (it's always guys) who want to know if a conviction that is 'expunged' must be reported. Above FINRA uses the word "pardoned," which I don't think is the same thing as "expungement." But whether a conviction were pardoned or expunged, it appears that the CHARGE still has to be reported. FINRA gives me that clue with this statement, "Even if the conviction is not reportable, the charge may still be reportable." Don't you love the shades of gray they use? They then write, "Registered persons have an obligation to determine whether a criminal event is required to be reported through one or more questions under Item 14A or 14B."

Hmm . . . so I plan to talk to some more attorneys, but it appears my assumption so far is correct: even if you get a felony conviction expunged from your record, your truthful answer to the question of whether you were ever CHARGED with a felony is . . . YES.


  1. I have been researching your posts and must say that they have been very helpful. In addition, I just realized that you are the funny author of the series 63 and 65 books I bought! What a coincidence. Well the time has come for me to submit my prints--Got an answer stating that a couple of records need clarification. I didn't disclose it on the "famous 14," because the incidence(s) were only arrests. I have submitted the requested documents and will see what happens. I will keep you posted as I see many others might have similar circumstances. FYI-I submitted court documents showing no charge filed. Great instructional books, keep it up!

  2. Thanks for the good words! Looks like you answered "famous 14" correctly. An arrest is not the same thing as a charge. Good luck with everything--it's a great business once you get yourself established.

  3. Hello again! To update this topic, FINRA requires extensive documents to prove that arrests are in fact only arrests. In some cases, court certified documents weren't enough at first. For others who are in similar boats, just be honest and disclose everything. Your compliance department can be your best friend of you are truthful. And to also touch on the bankruptcy/felony subject, again be truthful. If you explain and elaborate, often times you will still be able to get FINRA APPROVAL(WITH DISCLOSURE OF COURSE).