Statutory Disqualification and Eligibility Proceedings

What this video covers

• Why any felony conviction (even non-securities felonies like DUI homicide) triggers statutory disqualification, while misdemeanors only count if they involve specific securities-related conduct such as embezzlement, false reports, perjury, or fraudulent conversion
• How the 10-year disqualification window runs strictly from the date of conviction, not the date of release from prison, and why an 11-year-old conviction clears the SD bar regardless of parole timing
• What Form MC-400 is, who files it (the member firm, not the disqualified person), and how Form MC-400A differs when the disqualified entity is the firm itself
• The exact four-step eligibility proceeding: firm files MC-400 with FINRA's Department of Member Regulation, the self-regulatory organization (SRO) notifies the Securities and Exchange Commission (SEC), FINRA's National Adjudicatory Council (NAC) decides entry or continuance, and heightened supervision is mandated upon approval
• Why the SEC retains ultimate authority to set aside or modify the NAC's decision under the Exchange Act's SRO disciplinary review provision
• The architectural distinction between the Exchange Act's entry-gate authority (denying membership or association) and FINRA's separate eligibility and disciplinary proceedings for someone already inside the industry
• How the federal qualification requirement makes SRO qualification compliance mandatory under federal law, not merely a private membership condition