FINRA AWC – Settlement Agreement

FINRA AWC  – What is it?

Financial Industry Regulatory Authority – Letter of Acceptance Waiver and Consent 

A FINRA Letter of Acceptance, Waiver, and Consent (FINRA AWC) is a type of settlement agreement that is issued by the Financial Industry Regulatory Authority (FINRA) to resolve a regulatory investigation or disciplinary proceeding.  

FINRA, the self-regulator who oversees brokers and brokerage firms, takes a range of actions in response to securities violations, with the goal of protecting investors and maintaining the integrity of the securities industry.  

The regulator conducts investigations into allegations of securities violations. The investigation may involve interviewing witnesses, reviewing documents, and conducting other types of research to determine if there is evidence of wrongdoing. 

If FINRA determines that a securities violation has occurred, it may take enforcement action against the individual or firm responsible. This can include fines, suspensions, and other sanctions. 

The regulator also has the power to discipline brokers and firms for securities violations with a FINRA AWC. This can include revoking licenses or barring individuals from the industry altogether.  FINRA takes a proactive approach to securities violations, working to prevent and detect misconduct and taking swift action when violations occur. Through its enforcement actions, disciplinary actions, and other activities, FINRA helps to protect investors and maintain the integrity of the securities industry. 

What is a FINRA AWC? 

The FINRA AWC allows a respondent, which can be an individual or a firm, to accept responsibility for alleged violations without admitting or denying the charges. 

When a respondent agrees to an AWC, they typically agree to certain sanctions or penalties, which can include fines, suspensions, or even expulsion from the securities industry. The respondent also agrees to comply with any other conditions or restrictions imposed by FINRA. See: FINRA Sanctions Wedbush Securities for Regulatory Failures 

The AWC process is voluntary, and respondents have the option of either accepting or rejecting the proposed settlement agreement. If a respondent rejects the AWC, the matter will proceed to a formal disciplinary hearing before a FINRA hearing panel. 

It’s important to note that an AWC is not an admission of guilt or wrongdoing, nor is it a finding of violations by FINRA. Rather, it is a negotiated settlement agreement that allows both parties to resolve the matter without the time and expense of a formal disciplinary hearing. 

AWCs are a common way for FINRA to resolve regulatory investigations or disciplinary proceedings, and they allow respondents to take responsibility for alleged violations while avoiding the uncertainty and costs of a formal hearing. 

Broker Regulation 

FINRA regulates brokers with an AWC through a formal disciplinary process. When a broker is accused of violating FINRA rules, the regulator initiates an investigation to determine if the allegations are valid. If the investigation finds evidence of wrongdoing, FINRA may file a formal complaint against the broker. The broker then has the option to either contest the charges or enter into an AWC settlement agreement. 

If the broker chooses to enter into a FINRA AWC agreement, they typically agree to pay a fine and accept some form of punishment, such as a suspension or a restriction on their activities as a broker. The AWC settlement agreement also typically includes an admission of guilt and a waiver of the right to a formal hearing. 

Once the AWC agreement is finalized and approved by FINRA, the broker is bound by its terms and must comply with all of the agreed-upon sanctions. Failure to do so could result in additional disciplinary action by FINRA, including the possibility of revocation of the broker’s license to operate in the securities industry. 

After a broker enters into an AWC settlement agreement with FINRA, the terms of the agreement become final and binding. The broker must comply with all the agreed-upon sanctions and remedial measures, as well as any other requirements specified in the agreement. 

The specific consequences of an FINRA AWC settlement can vary depending on the nature and severity of the allegations against the broker. In general, however, the following outcomes are possible: 

• Fines: The broker may be required to pay a fine as part of the settlement agreement. The amount of the fine can vary depending on the severity of the alleged violations. 

• Suspension: The broker may be suspended from working in the securities industry for a specified period of time. The length of the suspension can vary depending on the nature and severity of the alleged violations. 

• Restrictions: The broker may be subject to restrictions on their activities as a broker. For example, they may be prohibited from soliciting or recommending certain types of securities to clients. 

• Remedial measures: The broker may be required to complete certain remedial measures, such as additional training or education, to address the alleged violations. 

• Admission of guilt: The broker may be required to admit to the alleged violations as part of the settlement agreement. 

Once the AWC settlement agreement is finalized and approved by FINRA, the broker is bound by its terms and must comply with all the agreed-upon sanctions and remedial measures. Failure to do so could result in additional disciplinary action by FINRA, including the possibility of revocation of the broker’s license to operate in the securities industry. 

Check your Broker’s Disciplinary Record 

BrokerCheck is a public online database maintained by FINRA that provides information about brokers and brokerage firms. This database includes information about AWC (Acceptance, Waiver, and Consent) settlements that brokers have entered into with FINRA. 

When a broker enters into an AWC settlement agreement with FINRA, the agreement is recorded in the Central Registration Depository (CRD), which is a database maintained by FINRA. The CRD is the official registration and licensing system for the securities industry and includes information about registered brokers, brokerage firms, and securities offerings. 

The AWC settlement agreement is then reflected in the broker’s record on BrokerCheck. BrokerCheck users can search for a broker by name or by the broker’s CRD number, and the search results will include information about any AWC settlements the broker has entered into with FINRA. 

The information provided on BrokerCheck about AWC settlements includes the date the settlement was reached, the allegations against the broker, the sanctions imposed as part of the settlement, and any other details about the case. This information can help investors make informed decisions about whether to work with a particular broker or brokerage firm. 

BrokerCheck is an important tool for investors to research brokers and brokerage firms and to ensure that they are making informed investment decisions. 

Hiring a Securities Attorney  

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.     

Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.      

With over 40 years of securities law experience, including experience working at FINRA and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions attempt to recover their investment losses.      

The White Law Group has offices are in Seattle, Washington and Chicago, Illinois, and reviews securities fraud cases throughout the country.   

The foregoing information, which is all publicly available, is being provided by The White Law Group. The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois. 

If you have concerns regarding investments you purchased through and would like to speak with a securities attorney, please call The White Law Group at 888-637-5510. 

For more information on The White Law Group, visit whitesecuritieslaw.com.