FINRA’s Probe of Businessman Violates Due Process, Says Lawsuit

The Financial Industry Regulatory Authority is exceeding its constitutional authority by forcing a New York financial planner to waive his right against self-incrimination or face sanctions, according to a lawsuit.

Francis G. Smith of FGS Financial Inc. filed his complaint Feb. 15 in the US District Court for the District of Columbia against the financial industry’s self-regulator.

During a probe of Smith’s compliance with continuing education requirements, FINRA sought sworn testimony, the complaint says. The self-regulator’s request allegedly said Smith could face expulsion from the securities industry if he asserted his Fifth Amendment privilege.

It’s the latest challenge to FINRA ...