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Disciplinary Procedures of the Society of Financial Service Professionals

Article 1: Introduction

The Society of Financial Service Professionals has created a Code of Professional Responsibility by which all members are bound. The following Disciplinary Procedures were developed to support the credibility of this Code and to ensure the proper and timely administration of its tenets. In drafting the procedures, every effort has been made to guarantee due process, bring about a fair resolution, and to respect the rights of the parties involved. Individuals seeking guidance related to the Code of Professional Responsibility and/or these Disciplinary Procedures are encouraged to contact the Society's Ethics Information Line at 800-927-2427, ext. 2536.

Article 2: Terminology

  1. Ethics Counsel: A designated member of the Society staff who shall have overall accountability for ensuring proper administration of the Code of Professional Responsibility.
  2. Charged Member: A Society member who is charged with violating the Code of Professional Responsibility.
  3. Complainant: An individual who charges a Society member with violating the Code of Professional Responsibility.
  4. Complaint Review Committee: A group of three or five Regular Society members with responsibility for reviewing complaints under the Code of Professional Responsibility and making a prima facie determination as to whether sufficient information exists to support the charges made. This group may be a subset of the Society's national ethics committee, or such other Regular Society members as selected by the Society President or his or her designee. (The Complaint Review Committee's role is akin to that of a grand jury.)
  5. Hearing Panel:* A group of three or five Regular Society members with responsibility for hearing an ethics case, making a finding as to whether the Society's Code of Professional Responsibility has been violated; and imposing an appropriate penalty.
  6. Appeal Panel:* A group of three Regular Society members with responsibility for reviewing the findings of a Hearing Panel, upon appeal from the charged member.
  7. Ethics Chair: Individual appointed by each Society Chapter with responsibility for serving on Hearing Panels and Appeal Panels when called upon to do so by the Ethics Counsel. Ethics Chairs may carry other responsibilities as determined by their Chapters.

    *As under the current ethics enforcement procedures, the Society will require Chapters to name an Ethics Chair. These Ethics Chairs will be given training and asked to be available to serve as members of an Hearing Panel or Appeal Panel.

  8. Professional License. A professional license is a license granted by a governmental or other regulatory body which authorizes an individual to practice in a particular field of endeavor, provide certain services to clients, or effect certain transactions. Only those licenses related to the work which makes the individual eligible for Society membership are relevant for purposes of these procedures.

Article 3: Initiation of Action and Notice*

  1. Complaints, alleging a violation of the Code of Professional Responsibility, shall be submitted in writing to the Ethics Counsel and signed by the complainant.
  2. Complaints may be filed by a member of the Society, another financial service professional, or any member of the general public.
  3. Within fifteen (15) days of receipt of a complaint, the Ethics Counsel shall notify the charged member and send him/her a copy of the complaint, a copy of the Code of Professional Responsibility, and a copy of these disciplinary procedures.
  4. Upon notice of the complaint, the charged member has the option of submitting a one-page response to the allegations to the Ethics Counsel. If the charged member decides to file this response, he/she must do so within fifteen (15) days of receipt of the complaint. Failure to file a response shall not affect the charged member's rights to due process as provided herein.

*See Article 10 for Procedures relating to conviction of a crime or suspension of a professional license.

Article 4: Investigation of the Complaint

  1. The Ethics Counsel shall review the complaint, and, in a timely manner, shall conduct such investigation as may be necessary to allow the Complaint Review Committee to determine whether the complaint provides sufficient information to support a finding of misconduct under the Code of Professional Responsibility.
  2. Upon completion of the investigation, the Ethics Counsel shall review his/her findings with the Complaint Review Committee. If any member of the Complaint Review Committee has a business, financial, or familial relationship with either the charged member or complainant, or has any relationship, which could result in a conflict of interest, he/she shall be replaced for these proceedings by the Ethics Counsel. The Complaint Review Committee has the discretion to seek additional information from the Ethics Counsel, if such information is necessary to reach a determination.
  3. If the Complaint Review Committee determines, by majority vote, that the complaint provides sufficient information to support a finding of ethical misconduct under the Code of Professional Responsibility, then the matter shall be submitted to a Hearing Panel.
  4. If the Complaint Review Committee determines, by majority vote, that the complaint provides insufficient information to support of a finding of ethical misconduct under the Code of Professional Responsibility, then the complaint shall be dismissed. The Ethics Counsel shall then notify the complainant and the charged member. Upon such notice, the complainant shall have fifteen (15) days to file a Request for Reconsideration with the Ethics Counsel.

Article 5: Request for Reconsideration

    Upon receipt of a Request for Reconsideration, a new Complaint Review Committee shall be appointed and shall have sixty (60) days to determine whether to reconsider the case and report its decision.
  1. If the Request for Reconsideration includes any new information, this information shall be sent to the charged member, and the member shall have the option of submitting a one-page response to the allegations to the Ethics Counsel. If the charged member decides to file this response, s/he must do so within fifteen (15) days of receipt of this information. Failure to file a response shall not affect the charged member's rights to due process as provided herein.
  2. Upon reconsideration, if the Complaint Review Committee determines there is insufficient information to support a finding of ethical misconduct, the complaint shall be dismissed and this decision shall be final and binding upon all parties and shall be communicated accordingly.

Article 6: Hearings

  1. A Hearing is conducted before a Hearing Panel. The purpose of the Hearing is to determine if the charged member has violated the Society's Code of Professional Responsibility and, if so, to decide upon an appropriate penalty.
  2. One member of the Hearing Panel shall be designated as Chair by the other Panel members. The Chair shall set rules for and facilitate the Hearing, consistent with these procedures. If any member of the Hearing Panel has a business, financial, or familial relationship with either the charged member or the complainant, or if he/she has any relationship that would result in a conflict of interest, he/she shall be replaced for these proceedings by the Ethics Counsel.
  3. A Hearing shall be quasi-judicial in nature. The parties testifying shall be sworn; the charged member may not be required to testify; a verbatim transcript may be made; and written evidence may be made part of the record.
  4. The Ethics Counsel, or his or her delegate, shall be responsible for presenting and moving the case against the member. He or she shall state the specific violations with which the member is charged; present and question witnesses; and introduce into the record nonverbal testimony.
  5. The decision of the Hearing Panel shall be based solely upon matters introduced during the course of the Hearing. The members of the Panel may ask questions of any party testifying for purposes of clarification or amplification. Charges not supported by a preponderance of the evidence shall be resolved in favor of the charged member.
  6. Findings of the Hearing Panel must be made by majority vote.

Article 7: Findings of the Ethics Hearing Panel

  1. If the Hearing Panel decides, by the majority vote, that the member did not violate the Code of Professional Responsibility, this decision shall be binding upon the Society and its Chapters and there shall be no subsequent rehearing of these charges. The charged member, the complainant, and other appropriate parties with a need to know, shall be advised of the decision. A copy of the record and supporting materials shall be kept on file with the Society for a period of three (3) years.
  2. If the Hearing Panel decides, by a majority vote, that the charged member did violate the Code of Professional Responsibility, then at that same time and place, the Hearing Panel shall, by majority vote, decide upon a penalty.

Article 8: Penalties

  1. A Hearing Panel is empowered to impose these penalties: (a) a letter of private reprimand; (b) public censure; (c) suspension of Chapter and national membership; or (d) revocation of Chapter and national membership.
  2. Private Reprimand. The decision of a Hearing Panel to impose the penalty of private reprimand shall be final and binding upon all parties. A letter of reprimand shall be sent to the charged member with a copy to the complainant. A copy of the letter of reprimand, plus a copy of the hearing record, shall also be provided to the Society for its case file and shall be kept for a period of three (3) years. The confidential nature of the reprimand shall be communicated to all relevant parties.
  3. Public Censure. The decision of a Hearing Panel to impose the penalty of public censure shall be binding upon all parties.
    1. The letter of censure shall be sent to the charged member with a copy to the complainant. A copy of the letter of censure and the hearing record shall be provided to the Society for its case file and shall be kept for a period of three (3) years.
    2. The act of public censure shall be reported at the next business meeting of the Chapter and published in the Chapter newsletter or other official Chapter communication. Such reporting and publication shall limit itself to a statement that a named member has, as a result of a hearing held before a Hearing Panel, been censured by the Society for named violations of the Code of Professional Responsibility; that a letter of censure has been sent to the named member; and that notification of this action has been given to the complaining party and to the Society. If the charged member is not a member of a Chapter, the information described herein shall be reported in another appropriate publication.
    3. Effective on the date of the decision of a Hearing Panel, a member who has received a letter of censure shall be barred from Chapter and national office or service for a period of one year.
  4. Suspension or Revocation of Membership. The decision of the Hearing Panel to impose a penalty of suspension or revocation of Society membership shall be binding upon all parties. A letter of suspension/revocation shall be sent to the charged member from the Chair of the Hearing Panel. The complainant, the Chapter President (if the charged member is a member of a Chapter), and the Society shall be advised of the decision, and a copy of the record and supporting materials shall be kept on file with the Society for an indefinite period of time.
    1. If the Hearing Panel decides, by majority vote, to impose a penalty of suspension of membership, it must then determine the length of time for the suspension.
    2. It shall be standard procedure to publish the fact of a revocation or suspension of membership, together with the name of the member in a press release, in a Society publication, and/or other form of publicity as may be appropriate. Such communication shall be shared with appropriate state regulatory authorities.
  5. Publication of information regarding penalties imposed by a Hearing Panel shall be withheld until the time for appeal has passed or the appeal process has been completed.

Article 9: Appeal

  1. A member who has received a penalty of public censure, suspension or revocation of membership shall have thirty (30) days from the date of receiving notification of such penalty to file an appeal with the Ethics Counsel. The appeal must be in writing and must state the reason(s) why the decision of the Hearing Panel is in error.
  2. Upon receipt of the appeal, the Ethics Counsel shall, in a timely manner, convene an Appeal Panel, consisting of three Regular Society members. Except for the Ethics Counsel, no party who participated in the Hearing, may participate in the appeal.
  3. The charged member/appellant shall have the opportunity to present his/her position and the complainant shall have the opportunity for rebuttal. No witnesses may be called and no new evidence may be presented, unless such matter is being appealed pursuant to Article 10.
  4. Upon majority vote, the Appeal Panel shall determine whether to upheld the findings of the Hearing Panel or amend them.
  5. The decision of the Appeal Panel shall be final and binding on all parties. Communication of the decision shall be made in accordance with the notification procedures described above in Articles 7 and 8.

Article 10: Conviction of a Crime or Suspension/Revocation of a Professional License

  1. If the Ethics Counsel receives objective, substantiated information that a member of the Society has been convicted of a crime, except misdemeanor traffic offenses, or has had a professional license suspended or revoked by a regulatory authority, this information shall be referred to a Complaint Review Committee.
  2. The Complaint Review Committee shall review this information, make such further investigation as may be necessary, and make a timely determination as to an appropriate penalty to impose: (a) public censure; (b) suspension of membership; or (c) revocation of membership. The Committee shall not have the discretion of imposing a lesser penalty.
  3. The Ethics Counsel shall then follow the procedures outlined in Article 8 above regarding notification.
  4. Upon notification, the member shall then have the right to follow the Appeal process as outlined in Article 9.

Article 11: Suspension or Revocation of a Professional Designation or Educational Credential.

  1. If a member of the Society's right to use a professional designation or educational credential, which is recognized by the Society as creating eligibility for Regular membership, is suspended or revoked, he/she shall become automatically ineligible for Society membership.
  2. If the member continues to hold, in good standing, an additional educational credential or professional designation which is recognized by the Society as creating eligibility for Regular membership, Society membership may be maintained, subject to a review under these procedures.

Article 12: Reinstatement After Suspension

  1. A Society member who has been suspended for one (1) year or less may be automatically reinstated at the end of the suspension period, assuming all other conditions for membership are met, upon submission of a membership application and payment of dues.
  2. A Society member who has been suspended for more than one (1) year may apply for membership upon expiration of the period of suspension. The membership application shall be forwarded to the Ethics Counsel and reviewed by a Complaint Review Committee. The Complaint Review Committee shall have the authority and discretion to accept the application for membership or to renew the period of suspension.
  3. If the period of suspension is renewed, the member shall have the right to appeal, pursuant to the procedures outlined in Article 9 above.

Article 13. Settlement Option

  1. At any time, following the filing of a complaint under Article 3 herein and prior to a determination by the Hearing Panel, either the complainant or the charged member may propose an offer of settlement. Such offer of settlement must be in the form of a written affidavit and shall be sent to the Ethics Counsel.
  2. The offer of settlement must be consistent with the charges made under the Code of Professional Responsibility and must include a provision agreeing to waive the right to an appeal, should the offer be accepted.
  3. The Ethics Counsel shall review the offer with the opposing party and either the Complaint Review Committee or the Hearing Panel, depending on the stage of the proceedings.
  4. If the offer of settlement is accepted, it shall be binding on all parties. If the offer of settlement is rejected, the proceedings against the charged member shall continue in accordance with these procedures.
  5. In the event the offer of settlement results in a penalty to the charged member, notification of such penalty shall be handled in accordance with Article 8.

Article 14. Confidentiality

All matters related to the filing, investigation, and hearing of a complaint under the Society's Code of Professional Responsibility and these Disciplinary Procedures are to be considered confidential, unless otherwise required to be disclosed as described herein.