View Whole SectionText only Print Print Manager Link
Previous Next

9840. Issuance of Order by Hearing Panel

(a) Basis for Issuance of a Temporary Cease and Desist Order in a TCDO Proceeding
The Hearing Panel shall issue a written decision stating whether a temporary cease and desist order shall be imposed. The Hearing Panel shall issue the decision not later than ten days after receipt of the hearing transcript, unless otherwise extended by the Chief Hearing Officer or Deputy Chief Hearing Officer for good cause shown. A temporary cease and desist order shall be imposed if the Hearing Panel finds:
(1) that the Department of Enforcement or Department of Market Regulation has made a showing of a likelihood of success on the merits; and
(2) that the alleged violative conduct or continuation thereof is likely to result in significant dissipation or conversion of assets or other significant harm to investors prior to the completion of the underlying disciplinary proceeding under the Rule 9200 and 9300 Series.
(b) Basis for Issuance of a Permanent Cease and Desist Order in a PCDO Proceeding
The Hearing Panel shall issue a written decision stating whether a permanent cease and desist order shall be imposed. The Hearing Panel shall issue the decision not later than ten days after receipt of the hearing transcript, unless otherwise extended by the Chief Hearing Officer or Deputy Chief Hearing Officer for good cause shown. A permanent cease and desist order shall be imposed if the Hearing Panel finds:
(1) by a preponderance of the evidence that the alleged violation specified in the notice has occurred; and
(2) that the violative conduct or continuation thereof is likely to result in significant market disruption or other significant harm to investors.
(c) Content, Scope, and Form of Temporary Cease and Desist Order
A temporary cease and desist order shall:
(1) be limited to ordering a Respondent (and any successor of a Respondent, where the Respondent is a member firm) to cease and desist from violating a specific rule or statutory provision, and, where applicable, to ordering a Respondent (and any successor of a Respondent, where the Respondent is a member firm) to cease and desist from dissipating or converting assets or causing other harm to investors;
(2) set forth the alleged violation and the significant dissipation or conversion of assets or other significant harm to investors that is likely to result without the issuance of an order;
(3) describe in reasonable detail the act or acts the Respondent (and any successor of a Respondent, where the Respondent is a member firm) shall take, refrain from taking, or both; and
(4) include the date and hour of its issuance.
(d) Content, Scope, and Form of Permanent Cease and Desist Order
A permanent cease and desist order shall:
(1) be limited to: (A) ordering a Respondent to cease and desist from violating Rule 5210.03, and/or (B) ordering a Respondent to cease and desist from providing market access to a client of Respondent that is causing violations of Rule 5210.03;
(2) set forth the violation and the significant market disruption or other significant harm to investors that is likely to result without the issuance of an order;
(3) describe in reasonable detail the act or acts the Respondent is to take or refrain from taking and to suspend the Respondent unless and until such action is taken or refrained from; and
(4) include the date and hour of its issuance.
(e) Duration of Order
(1) A temporary cease and desist order shall remain effective and enforceable until the issuance of a decision under Rule 9268 or Rule 9269, or until a settlement offer is accepted pursuant to Rule 9270.
(2) A permanent cease and desist order shall remain effective and enforceable unless modified, set aside, limited, or suspended pursuant to Rule 9850.
(f) Service and Dissemination Requirements
The Office of Hearing Officers shall serve the Hearing Panel's decision and any temporary or permanent cease and desist order on the Department of Enforcement or the Department of Market Regulation and the Respondent (or upon counsel representing the Respondent or person, or other person authorized to represent others under Rule 9141, when counsel or other person authorized to represent others under Rule 9141 agrees to accept service for the Respondent) by personal service, overnight commercial courier, facsimile, or email. If service is made by facsimile or email, the Office of Hearing Officers shall send an additional copy of the Hearing Panel's decision and any temporary or permanent cease and desist order by personal service or overnight commercial courier. Service is complete upon sending the notice by facsimile or email, sending the notice by overnight courier, or delivering it in person, except that, where duplicate service is required, service is complete when the duplicate service is complete. The temporary or permanent cease and desist order shall be effective when service is complete. The Office of Hearing Officers shall provide a copy of a temporary or permanent cease and desist order to each FINRA member with which a Respondent is associated.
(g) Delivery Requirement
Where a Respondent is a member firm, Respondent shall deliver a copy of a temporary or permanent cease and desist order, within one business day of receiving it, to its associated persons.
Amended by SR-FINRA-2016-043 eff. Dec. 15, 2016.
Amended by SR-FINRA-2015-019 eff. Nov. 2, 2015.
Amended by SR-FINRA-2009-035 eff. July 14, 2009.
Amended by SR-FINRA-2009-034 eff. June 23, 2009.
Amended by SR-FINRA-2008-021 eff. Dec. 15, 2008.
Adopted by SR-NASD-98-80 eff. June 23, 2003.

Selected Notices: 03-35, 08-57, 15-35, 17-22.

Previous Next