FINRA Panel Suspends Broker In Market Manipulation Case After Pleading Fifth Amendment During Testimony

16th March 2015

The FINRA Department of Market Regulation requested an on-the-record testimony of a representative at Lek Securities Corporation regarding an investigation into possible market manipulation. During the testimony, the Lek representative invoked the Fifth Amendment to the U.S Constitution and refused to answer questions on the basis that FINRA is not a governmental entity. FINRA argued that the SEC’s involvement in the case did not constitute a state action, allowing the Department of Market Regulation to issue the representative a Notice of Suspension from associating with any FINRA member firm based on his refusal to answer questions. Upon the representative’s request for a hearing, which stayed his suspension, the FINRA panel ordered his suspension, concluded that the representative failed to establish his state action defense and that he had violated FINRA Rule 8210 by refusing to testify.