LYTEL & LYTEL, LLP represents CFP® Professionals and Candidates during the Certified Financial Planner Board of Standards, Inc ("CFP Board") Disciplinary and Ethics Commission ("The DEC"), including the entire disciplinary process: Investigation, Hearing Panel and Appeal Committee.
The CFP Board takes violations of Rules, Ethics & Professional Responsibility very seriously and therefore strictly enforces professional conduct violation matters. The CFP Board's enforcement process incudes written notice to individuals under investigation, the opportunity to respond to the matters under investigation, the opportunity to appear at a hearing to address allegations of misconduct, the right to be represented by legal counsel and introduce witnesses and evidence, the right to settlement, and the right to appeal decisions involving discipline.
Diana P. Lytel is uniquely qualified as a defense attorney to oversee the Professional Conduct-Liability legal group given her work within the National Association of Securities Dealers (now FINRA), her experience in the Investigation Division at the Department of Corporations (Department of Business Oversight) and her tenure with Morgan Stanley's litigation department. Her specialized legal background with allegations of complex violations has been a great asset to our clients as she frequently counsels Respondents through professional conduct disciplinary matters.
Ms. Lytel is recognized for her legal excellence by Super Lawyers® and with an AV Rating by Martindale-Hubbell®, the highest Preeminent "5.0/5.0" attorney rating in her profession. In 2017, she graced the cover of Verdict Magazine titled "Young Guns: Stars of the Wild West" where Ms. Lytel was featured on multiple pages. She consistently demonstrates leadership in her legal profession by holding both Executive & Board of Director positions with prominent law organizations, while also being appointed to Chair several of the Board's Committees.
Investigations by the CFP Board typically are initiated as a result of a complaint submitted by the public (including other CFP® Professionals), which in turn will prompt the CFP Board to investigate, or disclosures by CFP® professionals during their renewal application or as a result of required reporting to the CFP Board. After receiving a complaint or a disclosure directly by a CFP® Professional, the CFP Board staff attorney is charged to initiate the investigation. The CFP Board staff attorney then has the option to either dismiss the allegations with a letter of caution to the CFP® professional, or begin the work necessary to formulate a complaint to be filed by the CFP Board.
CFP Board Counsel shall give written notice to the Respondent that the Respondent is under investigation and of the general nature of the allegations asserted against the Respondent. The Respondent shall have 30 calendar days from the date of notice of the investigation to file a written response to the allegations with the CFP Board. If you received a notice of investigation, then you have a right to legal counsel who can advise or serve as the Respondent designated counsel. Again, if you received a notice of investigation, then you have the right to discovery, witnesses, motions and appeal.
To be clear, the best chance for resolving any CFP Board investigation matter with a favorable outcome is early-one with the assistance of a skilled attorney with expertise in this defense area. For example, we have prospective clients who didn't take the right course with their initial response and are later presented with a severe discipline action. This is problematic for a favorable outcome as the "die has been cast" and the case has already been botched. The CFP Board's public disciplinary action can take one of three forms — a public Letter of Admonition, a temporary suspension of the individual's CFP® certification or a permanent revocation of the individual's CFP® certification — depending on the severity of the breach, any mitigating or aggravating circumstances, and the individual's cooperation with the Board's investigation.
CFP Board has adopted the Code of Ethics and Professional Responsibility (“Code of Ethics”), Rules of Conduct, and Financial Planning Practice Standards (“Practice Standards”), which establish the expected level of professional conduct and practice for CFP® professionals. The DEC is charged with the duty of reviewing and taking appropriate action with respect to alleged violations of the Code of Ethics and Rules of Conduct, alleged non-compliance with the Practice Standards and conduct reviewed pursuant to the Fitness Standards.
The DEC may conduct investigations for financial advisors who potentially violate CFP Rules, which can be triggered by a number of events, such as: customer/client arbitrations, criminal matters, regulatory actions by the SEC, FINRA and state regulators, bankruptcies, employment conduct violations, complaints from other financial advisors with CFP designation and even anonymous tips. The DEC convenes three times a year to hold disciplinary hearings for CFP® professionals accused of violating provisions of the Standards.
GROUNDS FOR DISCIPLINE
Misconduct by a Respondent, individually or in concert with others, including the following acts or omissions, shall constitute grounds for discipline, whether or not the act or omission occurred in the course of a client relationship:
(a) Any act or omission that violates the provisions of the Code of Ethics and/or Rules of Conduct;
(b) Any act or omission that fails to comply with the Practice Standards;
(c) Any act or omission that violates the criminal laws of any State or of the United States or of any province, territory or jurisdiction of any other country, provided however, that conviction thereof in a criminal proceeding shall not be a prerequisite to the institution of disciplinary proceedings, and provided further, that acquittal in a criminal proceeding shall not bar a disciplinary action;
(d) Any act that is the proper basis for professional discipline, as defined herein, provided professional discipline shall not be a prerequisite to the institution of disciplinary proceedings, and provided further, that dismissal of charges in a professional discipline proceeding shall not necessarily bar a disciplinary action;
(e) Any act or omission that violates these Disciplinary Rules or that violates an order of discipline;
(f) Failure to respond to a request by CFP Board staff, or obstruction of the DEC, or any panel thereof, or CFP Board staff in the performance of its or their duties;
(g) Any false or misleading statement made to CFP Board.
ARTICLE 4: FORMS OF DISCIPLINE
4.1 Private Censure. The DEC may order private censure of a Respondent, which shall be an unpublished written reproach mailed by the DEC to a censured Respondent.
4.2 Public Letter of Admonition. The DEC may order that a Public Letter of Admonition be issued against a Respondent, which shall be a publishable written reproach of the Respondent’s behavior. It shall be standard procedure to publish the Public Letter of Admonition in a press release or in such other form of publicity selected by the DEC.
4.3 Suspension. The DEC may order suspension for a specified period of time, not to exceed five years. CFP Board must publish the fact of the suspension together with identification of the Respondent in a press release, or in such other form of publicity as is selected by the DEC.
4.4 Revocation. The DEC may order permanent revocation of a Respondent’s right to use the marks. In the event of a permanent revocation it shall be standard procedure to publish the fact of the revocation together with identification of the Respondent in a press release, or in such other form of publicity as is selected by the DEC.
Automatic Interim Suspension - An interim suspension shall immediately be issued without a hearing. Felony conviction for any crime; Misdemeanor conviction for fraud, misrepresentation or crimes of moral turpitude; Revocation of a financial professional license (securities, insurance, accounting or bank-related license) unless the revocation is administrative in nature ( i.e. the result of the individual determining to not renew the license by not paying fees).
If you have received a CFP Notice of Investigation, a CFP Complaint, or a notice of Presumptive Bar as a CFP Candidate, it is in your best interest to at least consult with legal counsel to weigh your options and gain a better understanding of the process. It is also recommended that should you choose legal representation then you retain counsel with expertise with CFP disciplinary matters.
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