Our client is suing a former broker and we just received a subpoena for certain documents that appear to have nothing to do with the case. Do we need to comply with this subpoena?
The short answer is "yes." Under the Federal Arbitration Act, subpoenas issued in an arbitration have the same force and effect and can be enforced in the same manner as subpoenas issued in court. While you could try and fight the subpoena by filing an objection with the arbitration panel, be aware that arbitrators frequently give parties broad latitude in obtaining documents that might, allegedly, be helpful. The request would have to be far afield from the facts of the case before the panel would consider sustaining an objection. Clearly, you should only produce what's being asked for and no more. You can also require reasonable compensation for producing the records. Usually, costs of $0.50 to $1 per page for copies, and $10 to $15 per hour for a clerk's time are considered reasonable. Extreme costs would have to be justified, however. Note that responding to a subpoena is an exception to Regulation S-P's privacy requirements. You should probably contact your client and his or her attorney to make sure they know about the subpoena. In arbitration, the client would have had an opportunity to object and be heard by the arbitration panel before the chairman issued the subpoena.
I have the Series 6 license and want to take the Series 24 exam. I was told that I need to take the Series 7 exam first, but the FINRA site doesn't list the 7 as a prerequisite. Do I really need to take another exam first?
The Series 6 license allows representatives to sell mutual funds, variable annuities and insurance premiums. It does not permit them to sell corporate or municipal securities, direct participation programs and options. In contrast, the Series 7 license allows representatives to trade corporate stocks and bonds, REITs, municipal securities, options, investment company products, exchange traded funds and others. The Series 24 license permits you to supervise all areas of a broker-dealer's investment banking and securities business. However, it does not cover municipal securities or options. FINRA's website does not specifically list the Series 7 as a prerequisite to taking the Series 24, but it is generally understood that it is. There are other licenses that qualify you to sit for the Series 24 exam, but the Series 6 does not. Also, if you have one of the other licenses that qualify as a prerequisite, you may be limited in the types of products you can supervise with the Series 24 license. (My thanks to attorney Erika Subieta for her assistance with this answer.)
Alan J. Foxman is an attorney with the law offices of Rita G. Dew, P.A.
and a senior consultant with National Compliance Services, Inc.
in Delray Beach, Fla. He can be contacted at: this email address.