FINRA Rule 9144

Together these provisions implement the principle — recognized in administrative law, constitutional due process doctrine, and Exchange Act Section 15A — that the legitimacy of FINRA's disciplinary authority depends on the persons who decide cases being genuinely independent from the persons who investigate and prosecute them.

FINRA Rule 9144 sits within the 9140 Proceedings subsection of the 9100 Application and Purpose section of the 9000 Code of Procedure series. It was adopted by SR-NASD-97-28 effective August 7, 1997 and last amended by SR-FINRA-2008-021 effective December 15, 2008 as part of the consolidated FINRA rulebook transition announced in Regulatory Notice 08-57. The rule has not been substantively amended since its 2008 consolidation — its core separation of functions architecture has remained stable since original adoption. FINRA Rules 9143 and 9144 are always cited together in AWC documents as companion rules whose protections are simultaneously waived by settling parties — they represent twin pillars of the procedural fairness framework that undergirds FINRA's disciplinary legitimacy.

The Constitutional and Statutory Foundation

The separation of functions requirement in FINRA Rule 9144 is rooted in both constitutional due process principles and the statutory framework of Exchange Act Section 15A. Due process requires that decision-makers in adjudicative proceedings be free from actual bias and from structural arrangements that create a constitutionally unacceptable risk of bias. In the government agency context — and by extension in the private SRO context where FINRA exercises delegated regulatory authority — combining the investigative and prosecutorial functions with the adjudicative function in the same persons or tightly integrated organizational units raises serious due process concerns.

The Alpine Securities Corp. v. FINRA litigation — which drove the June 2025 amendments to FINRA Rule 8320 and related rules — raised exactly these structural concerns at an institutional level, questioning whether FINRA's overall structure adequately separated its regulatory and adjudicative functions to satisfy constitutional requirements. While that litigation focused primarily on the immediacy of enforcement sanctions rather than the specific separation of functions provisions of FINRA Rule 9144, it reinforced the importance of FINRA's commitment to maintaining meaningful institutional separation between its enforcement and adjudicative functions.

The Interested FINRA Staff definition in FINRA Rule 9120(t) — which FINRA Rule 9144(a) invokes — is the precise boundary marker that identifies which FINRA employees fall on the prosecutorial side of the separation line: the Head of Enforcement, all Department of Enforcement employees reporting to the Head, and any FINRA employee who directly participated in authorizing the complaint, the examination, the investigation, the prosecution, or the litigation related to the specific proceeding. The precision of this definition ensures that the separation of functions prohibition targets the specific employees whose involvement creates genuine bias risk — not all FINRA employees generically.

FINRA Rule 9144(a): Interested FINRA Staff Separation

FINRA Rule 9144(a) establishes two complementary prohibitions — one restricting Interested FINRA Staff and one restricting Adjudicators — that together create the structural separation between the prosecutorial and adjudicative functions.

The first prohibition bars Interested FINRA Staff from advising an Adjudicator regarding a decision or otherwise participating in an Adjudicator's decision in any proceeding, except as counsel or a witness in the proceeding or as provided in the Rule 9550 series. The counsel and witness exceptions are operationally necessary — Department of Enforcement staff appear before Hearing Panels as counsel for FINRA in disciplinary proceedings, and their appearance in that adversarial advocacy role is not a violation of the separation of functions prohibition. What is prohibited is their participation in the Adjudicator's deliberative process — the private advisory role that would blur the line between prosecution and adjudication. An enforcement attorney who presents argument at a hearing is performing a permissible advocacy function; the same attorney who privately advises the Hearing Officer about how to evaluate the evidence or what sanction to impose is performing a prohibited advisory function.

The Rule 9550 series exception — expedited proceedings — reflects the more compressed and less formalized nature of those proceedings, in which the separation between enforcement-initiating staff and adjudicating bodies is maintained differently from the full disciplinary process.

The second prohibition in FINRA Rule 9144(a) is the reciprocal restriction on Adjudicators: no Adjudicator may advise Interested FINRA Staff regarding a decision or otherwise participate in Interested FINRA Staff's decisions — including the decision to issue a complaint and the decision whether to appeal or cross-appeal a disciplinary proceeding to the NAC. This prohibition prevents the adjudicative function from contaminating the prosecutorial function in the same way the first prohibition prevents the reverse. A Hearing Officer who privately advises Department of Enforcement staff on how to frame charges in a complaint being prepared, or who recommends whether enforcement should appeal an adverse hearing outcome, has crossed from the adjudicative into the prosecutorial function — a separation of functions violation regardless of the direction of the advice.

The explicit inclusion of the complaint issuance decision and the appeal or cross-appeal decision in the second prohibition is significant. These are the two most consequential prosecutorial decisions in the disciplinary process — whether to charge and whether to challenge an adverse outcome — and FINRA Rule 9144(a) ensures that Adjudicators have no role in either. This prevents the appearance of a pre-committed Adjudicator who has already made a prosecutorial judgment about the matter before sitting as a neutral decision-maker.

FINRA Rule 9144(b): Separation of Adjudicators

FINRA Rule 9144(b) establishes additional structural separations within the adjudicative function itself — separations that prevent persons who serve in one adjudicative role from crossing into other adjudicative roles that would compromise their independence.

The first separation prohibits Hearing Officers — including the Chief Hearing Officer — and Panelists of Hearing Panels and Extended Hearing Panels from participating in three specific decisions: the decision whether to issue a complaint under FINRA Rule 9211, the decision whether to appeal or cross-appeal a disciplinary proceeding to the NAC under FINRA Rule 9311, and any discussion or decision relating to a call for review, review, or appeal under the Rule 9300 series. These three prohibited participations correspond precisely to the three most consequential prosecutorial and appellate decisions in the disciplinary process. A Hearing Officer who has presided over a disciplinary proceeding cannot advise on whether enforcement should appeal the Hearing Panel's decision — doing so would convert the neutral adjudicator into an ex post advocate for or against the outcome they just adjudicated.

The second separation addresses FINRA Board Governors — the senior governance body of FINRA. Except when the Chair of the NAC is also a Governor, Governors are prohibited from participating in discussions or decisions relating to the above-referenced acts with the Review Subcommittee or the Hearing Officers and Panelists referenced above. This Governor separation prevents FINRA's highest governance body from influencing the specific adjudicative and appellate processes that FINRA Rule 9144(b) governs — ensuring that governance authority and adjudicative authority remain structurally distinct.

The exception for the NAC Chair who is also a Governor reflects the specific governance architecture of FINRA's National Adjudicatory Council — the appellate body that reviews Hearing Panel decisions. The NAC Chair's dual role necessarily involves some intersection between the governance and adjudicative functions, and FINRA Rule 9144(b) specifically accommodates this structural overlap rather than prohibiting it categorically.

FINRA Rule 9144(c): Waiver Through Minor Rule Violation Plan Letter Submission

FINRA Rule 9144(c) provides that submission of an executed minor rule violation plan letter under FINRA Rule 9216(b) constitutes a waiver of any claim that paragraphs (a) or (b) of FINRA Rule 9144 were violated in connection with any person's or body's participation in discussions about the terms and conditions of the plan letter or other consideration of it, including acceptance or rejection.

This waiver provision — mirroring the ex parte communication waiver in FINRA Rule 9143 — acknowledges the practical reality of the settlement process. AWC and minor rule violation plan letter negotiations necessarily involve communications between FINRA's enforcement function and the settling party about charges and proposed sanctions — communications that might technically raise separation of functions concerns given the involvement of various FINRA bodies in the negotiation and acceptance process. The waiver provision confirms that a party who voluntarily settles through an AWC or plan letter has accepted the settlement process as it exists and cannot later claim that the normal functioning of that process violated the separation of functions requirements.

The same waiver language appears verbatim in every FINRA AWC document — the standard AWC boilerplate confirms that the respondent waives any claim that FINRA Rule 9143's ex parte prohibitions or FINRA Rule 9144's separation of functions prohibitions were violated in connection with discussions about the AWC's terms and conditions, or other consideration of the AWC, including its acceptance or rejection. This standardized waiver ensures that settled matters cannot be reopened on separation of functions grounds after the fact.

The Structural Architecture: OHO, NAC, and FINRA Board

The practical implementation of FINRA Rule 9144's separation requirements is reflected in FINRA's organizational architecture. The Office of Hearing Officers — as an independent adjudicative body reporting to the FINRA CEO rather than to the enforcement function — is structurally separated from the Department of Enforcement. Hearing Officers are attorney-employees of FINRA, but their institutional reporting line and role are distinct from enforcement staff's. OHO does not participate in enforcement decisions; enforcement does not advise OHO on adjudicative decisions.

The National Adjudicatory Council — FINRA's primary appellate body — is composed of industry and public members who serve in an appellate adjudicative capacity, advised by Counsel to the NAC who is an OGC attorney rather than an enforcement attorney. The NAC's institutional separation from the Department of Enforcement ensures that appeals from Hearing Panel decisions are reviewed by persons with no prosecutorial involvement in the matter being appealed.

The FINRA Board — the ultimate governance authority — is separated from both the enforcement and adjudicative functions in the specific ways that FINRA Rule 9144(b) prescribes. Governors' participation in the specific disciplinary and appellate processes identified in FINRA Rule 9144(b) is prohibited — maintaining the governance function's independence from day-to-day enforcement and adjudicative operations.

Connection to FINRA Rule 9143 and the Due Process Framework

FINRA Rules 9143 and 9144 are the twin structural pillars of FINRA's adjudicative due process framework. FINRA Rule 9143 prohibits improper communications between the enforcement and adjudicative functions — preventing information from flowing between them through informal channels outside the official record. FINRA Rule 9144 prohibits improper structural participation — preventing the same persons from occupying both enforcement and adjudicative roles simultaneously. Together they implement the principle that adjudicative decisions must be made by persons who are genuinely independent from those who investigate and prosecute, and whose deliberations are informed only by the official record that all parties have equally contributed to.

The consistent pairing of FINRA Rules 9143 and 9144 in AWC documents, eligibility proceeding documents, and supervisory plan documents throughout FINRA's enforcement history confirms their status as companion rules whose combined effect creates the procedural legitimacy framework for FINRA's disciplinary system. A settlement that waives both simultaneously acknowledges that the settling party has accepted that framework rather than contesting its application to their specific proceeding.

Examination Relevance and Key Takeaways

FINRA Rule 9144 is tested on the Series 24 General Securities Principal examination in the context of FINRA's disciplinary system structure, the due process requirements applicable to FINRA proceedings, and the institutional architecture that separates enforcement and adjudicative functions. The rule's connection to FINRA Rule 9143, the Interested FINRA Staff definition in FINRA Rule 9120(t), and the AWC waiver framework of FINRA Rule 9216 makes it a central rule in examination questions addressing the structural fairness of FINRA's disciplinary process.

The key points to retain are these: FINRA Rule 9144 establishes the separation of functions requirement for all Code proceedings — prohibiting Interested FINRA Staff from advising Adjudicators or participating in adjudicative decisions and prohibiting Adjudicators from advising Interested FINRA Staff or participating in prosecutorial decisions including the decision to issue a complaint and whether to appeal or cross-appeal; the exceptions to the Interested FINRA Staff prohibition are appearance as counsel or witness in the proceeding and proceedings governed by the Rule 9550 series; Hearing Officers including the Chief Hearing Officer and Panelists are separately prohibited from participating in the complaint issuance decision, the appeal or cross-appeal decision, and any discussion or decision relating to Rule 9300 series calls for review, reviews, or appeals; Governors are prohibited from participating in discussions or decisions relating to these acts with the Review Subcommittee or Hearing Officers and Panelists except when the NAC Chair is also a Governor; submission of an executed minor rule violation plan letter constitutes a waiver of any separation of functions claim under paragraphs (a) or (b) in connection with discussions about the plan letter's terms and acceptance — identical waivers of both FINRA Rules 9143 and 9144 appear in every FINRA AWC document; the Interested FINRA Staff definition from FINRA Rule 9120(t) identifies the specific enforcement and investigation employees whose prosecutorial involvement creates the separation requirement; FINRA Rule 9144 and FINRA Rule 9143 are companion rules that together implement the due process requirement of genuine independence between prosecutorial and adjudicative functions; and the rule was adopted in 1997 and last amended December 15, 2008 through SR-FINRA-2008-021 with no substantive amendments since original adoption.