Disciplinary Rules & Procedures

Section 1

INTRODUCTION

The Financial Transitionist® Institute (“FTI”) has adopted the Code of Ethics and Standards of Professional Conduct (“Code of Ethics”), which, along with these Disciplinary Rules and Procedures (“Disciplinary Rules”) (collectively, “FTI Rules”), establish and enforce the ethical and professional standards of conduct for Certified Financial Transitionist® (“CeFT®”) professionals and candidates.

The purpose of the FTI Rules is to ensure the integrity of the CeFT® mark and designation, warranting the highest standards of ethical and professional conduct to clients of CeFT® professionals and to the public. These Disciplinary Rules establish FTI’s procedures for enforcing and upholding the FTI Rules. The FTI Rules may be amended from time to time, as needed or at the discretion of FTI.

CeFT® professionals and candidates are sometimes referred to herein as “Respondent.”

Section 2

Prior Designations

Certification as a Financial Transitionist® through FTI requires a candidate to first obtain a designation as a Certified Financial Planner (“CFP”), Certified Financial Analyst (“CFA”), Certified Investment Management Analyst (“CIMA”), or Certified Professional Accountant with Personal Financial Specialist designation (“CPA/PFS”). All CeFT® professionals and candidates must be and remain associated with and in good standing with the Financial Industry Regulatory Authority (“FINRA”). Failure to maintain such prior designations or associations will result in sanctions, as outlined herein.

Notwithstanding the above, certain CeFT® professionals have obtained the designation despite the lack of a prior designation at the sole discretion of FTI in cases where the professional was enrolled in the designation program during or prior to March 2016.

 

Section 3

DISCIPLINARY ACTION OF OTHER REGULATORY BODIES

3.1      Complaints, Investigations, or Actions by Other Regulatory Bodies

CeFT® professionals and candidates are subject to the disciplinary rules and guidelines of the SEC, FINRA, the CFP Board, the CFA Institute, CIMA, and/or AICPA (with other regulatory or self-regulatory agencies, the “Regulatory Bodies”). Any complaint to or investigation by any Regulatory Body must be disclosed to FTI no later than ninety (90) calendar days following the Respondent’s receipt of the complaint or notice of the investigation. This Section specifically includes disclosure of any civil litigation in any court.

The Respondent is solely responsible for providing FTI with all relevant pleadings, orders, or findings related to any complaint or regulatory investigation by any Regulatory Body no later than ninety (90) calendar days from Respondent’s receipt or filing of such document.

3.2      Pending Complaint or Action before Other Regulatory Bodies – Administrative Watch

Upon notification of a complaint before or investigation by any other Regulatory Body, FTI will automatically place Respondent on Administrative Watch (defined below). “Administrative Watch” status may include special inquiry into Respondent’s professional conduct, heightened review of Respondent’s records, interviews of Respondent’s supervisors and staff, and heightened review of Respondent’s use of the CeFT® mark or designation. Should FTI, through its Administrative Watch or otherwise, discover Respondent’s violations of the FTI Rules, FTI may institute disciplinary proceedings against Respondent independent of the other Regulatory Body’s action.

3.3      Final Findings of Other Regulatory Bodies

When FTI become aware that another Regulatory Body is investigating disciplinary violations by Respondent or hearing complaints against Respondent, FTI will defer to that Regulatory Body until such time as the pending litigation, arbitration, or investigation is resolved, other than to institute Administrative Watch, as set forth above.

3.4      Suspension or Revocation by Other Regulatory Bodies

The final decision, order, or finding of any Regulatory Body shall be informative to FTI with respect to FTI’s discipline of the Respondent. As such, and because a prior designation of CFP, CFA, CIMA, CPA/PFS is required to obtain and maintain a CeFT® designation, any suspension of a Respondent by another Regulatory Body shall result in an automatic suspension of equal duration by FTI from using the CeFT® designation. Likewise, any revocation of a designation or bar from any association of a Respondent issued by a Regulatory Body will result in an automatic revocation of the CeFT® designation.

In the case of a suspension, FTI expressly retains the sole discretion to review the other Regulatory Body’s suspension and to reinstate Respondent’s CeFT® designation or otherwise modify the terms of the CeFT® suspension; however, this review is secondary to the automatic suspension outlined above and is in the sole discretion of FTI. Upon suspension by another Regulatory Body, the Respondent must recognize the equal suspension from using the CeFT® mark until FTI issues a decision rejecting or modifying the suspension.

If a Respondent receives a revocation or bar from a CFP, CFA, CIMA, or CPA/PFS designation, but later obtains one of the other designations, Respondent may apply for reinstitution of the CeFT® certification pursuant to reinstitution procedures below.

3.5      Conviction of a Crime

With the exception of minor traffic offenses, a CeFT® professional or candidate must provide FTI with a copy of any criminal complaint or conviction against him or her in any jurisdiction, including felonies and misdemeanors of every description, within thirty (30) days of issuance. FTI reserves the right to implement any sanctions it deems proper after a review of the criminal complaint or conviction against Respondent.

Section 4

Complaints and discipline committee

4.1       Formation, Function, and Jurisdiction of the CDC

The FTI Board shall appoint a Complaints and Discipline Committee (“CDC”), formed pursuant to and governed by the bylaws of FTI. The CDC is charged with enforcing the FTI Rules, investigating any alleged or suspected non-compliance thereof, and issuing and enforcing appropriate sanctions. The CDC shall have original jurisdiction over all matters involving the professional and relevant ethical conduct of CeFT® professionals and candidates. The CDC shall also have the authority to review and consider the findings of other Regulatory Bodies, as set forth above, and to use information obtained therefrom to make disciplinary decisions.

4.2      CDC Chair

FTI or its Board of Directors shall appoint a member of the CDC to serve a chairperson of the CDC (“CDC Chair”). The CDC Chair shall be responsible for appointing a Hearing Officer (defined below) for each proceeding before the CDC and for presiding over all meetings, hearings, or considerations of the CDC. The CDC Chair shall be tasked with communicating decisions of the CDC to FTI and its board of directors.

In coordination with the FTI board of directors and/or FTI legal counsel, the CDC Chair will review and consider all complaints or information indicating potential violation of FTI Rules for potential disciplinary action or investigation.

4.3      CDC Hearing Officer

For each disciplinary proceeding or investigation initiated, the CDC Chair shall appoint a hearing officer (“Hearing Officer”) selected from the members of the CDC other than the CDC Chair, who may not serve as Hearing Officer. Within ten (10) days of FTI’s receipt of Respondent’s responsive pleading or any motion, FTI will provide all relevant pleadings, submissions, motions, and things to the Hearing Officer for review.

Based upon the documents and things filed during the course of the investigation or proceeding, the Hearing Officer will make a preliminary determination of the need for sanctions, as outlined below. The Hearing Officer will then present a written summary of findings and a recommendation for sanctions, dismissal, or further action to the CDC.

The Hearing Officer shall be the point person for all matters and communications related to the proceeding or investigation assigned to him or her.

In the case of a Motion for Reconsideration, as set forth in Section 11, below, the CDC Chair shall appoint a different Hearing Officer to hear the Motion for Reconsideration.

4.4       Conflicts of Interest

CDC members, the CDC Chair, and the Hearing Officer shall avoid any appearance of conflicted interest or impropriety. No CDC member, CDC Chair, or Hearing Officer shall participate in any proceeding in which that individual, a member of his/her immediate family, or a member of his/her firm has any identifiable interest.

Section 5

Proceedings

5.1      Initiation of Disciplinary Proceedings or Investigation

Upon a decision of the FTI Board of Directors, FTI legal counsel, and/or the CDC Chair to initiate disciplinary proceedings or a disciplinary investigation, FTI will prepare a formal Complaint or Notice of Investigation addressed to the subject CeFT® professional or candidate. FTI will then serve the Complaint or Notice of Investigation on the Respondent via certified U.S. Mail to Respondent’s last known address.

5.2      Hearing on the Papers

The Hearing Officer shall make disciplinary recommendations in connection with the FTI Rules solely on the pleadings, submissions, motions, and disclosures presented. Respondent shall not be afforded an in-person, virtual, or telephonic hearing.

5.3    Rules of Procedure and Evidence; Standard of Proof

Rules of procedure and evidence may be informative to the Hearing Officer and the CDC, but are not binding. The Hearing Officer and the CDC will employ a preponderance of the evidence standard of proof.

5.4    Evidence Considered

The Hearing Officer will receive and consider the Complaint or Notice of Investigation, Answer, and any evidence attached thereto in support of any party’s case, as well as any motions or submissions duly made by either the Respondent or FTI during the pendency of the proceeding or investigation. The Hearing Officer will not consider outside sources of information, except as disclosed and agreed to by all parties, with the exception of the Respondent’s past disciplinary history, if any, by FTI or any other Regulatory Body or court of law. Once the Hearing Officer has ruled on any given motion, that motion will not be considered by the CDC, except as directed by the CDC Chair.

5.5      Hearing Officer’s Recommendation to the CDC

At a regular meeting of the CDC, or otherwise as circumstances require, the Hearing Officer will present findings of fact and recommendations to the CDC regarding the investigation or proceeding over which he or she presides. After due consideration and discussion of the Hearing Officer’s recommendations, and incorporating any revisions deemed necessary by the CDC members, the CDC shall vote to approve or decline the recommendations, include institution of any recommended sanctions. Recommendations are approved or declined with a majority vote of a quorum of CDC members. The CDC Chair shall not vote unless needed to act as a tie-breaker.

Upon approval of the Hearing Officer’s recommendations or revised recommendations, the CDC Chair shall coordinate the finalization and drafting of the disciplinary order or decision.

If a Hearing Officer’s recommendations are declined by the CDC, the CDC Chair shall review the merits of the investigation or proceeding, including the written findings of fact and recommendations of the Hearing Officer, and shall either (a) approve the Hearing Officer’s recommendations on behalf of the CDC, or (b) remand the investigation or proceeding to another CDC member, who will then serve as Hearing Officer for reconsideration of the investigation or proceeding.

5.6       Timeliness

The CDC shall conduct issue an order or decision with respect to any proceeding or investigation as expeditiously as reasonably practicable.

Section 6

GROUNDS FOR DISCIPLINE or investigation

In addition to the disciplinary actions of other Regulatory Bodies or courts of law, as outlined in Section 3, violation of the FTI Rules by a CeFT® professional or candidate, individually or in concert with others, including, but in no way limited to, acts or omissions that constitute the following violations, shall constitute grounds for discipline and/or investigation, whether or not the act or omission occurred in the course of a client relationship:

(a)  Violation of any of the principles set forth in the Code of Ethics;

(b)  Failure to maintain, in good standing, a required prior designation, as set forth in Section 2, or to remain in good standing with any Regulatory Body.

(c)  Violation of the laws of any State, of the United States or of any jurisdiction of any other country. Conviction in a criminal proceeding or liability in a civil action shall not be prerequisite to the institution of disciplinary proceedings hereunder, and acquittal or a finding of no liability shall not bar a disciplinary action hereunder;

(d)  Any act or omission that is the proper basis for discipline by any Regulatory Body or governing body. No action or finding by any of these Regulatory Bodies shall be prerequisite to the institution of disciplinary proceedings by FTI, and dismissal of charges or lack of investigation by any Regulatory Body shall not necessarily bar a disciplinary action by FTI;

(e)  Violation of these Disciplinary Rules, the FTI Rules, or any order of discipline by FTI, the CDC, or any Regulatory Body;

(f)   Failure to respond fully, completely, timely, and honestly to any request by FTI, the CDC, or a Hearing Officer, or obstruction of any investigation, administration, or proceeding by FTI, the CDC, or a Hearing Officer;

(g)  Making, communicating, or corroborating any false or misleading statement with disregard for its truth to the FTI, the CDC, a Hearing Officer, or any other person or body tasked with the oversight of CeFT® professionals and candidates.

Section 7

FORMS OF DISCIPLINE

After investigation and/or hearing, and upon determination of the merits of the allegations of violations against the Respondent, the CDC may recommend: 

7.1        Dismissal

The CDC may determine that no grounds for discipline have been established. In such case, the CDC will dismiss the matter.

7.2       Non-Public Cautionary Letter

Where no cause for further action can be found, the CDC may dismiss the proceeding or investigation, but may issue a cautionary letter to Respondent to assist the Respondent in avoiding further allegations of misconduct. Such a letter shall not be publicly available, and shall not be considered a disciplinary action or rebuke against the Respondent.

7.3       CeFT® Suspension

The CDC may suspend a Respondent from utilizing the CeFT® mark or designation for a specified period of time, not to exceed three (3) years. In the event of a suspension, FTI 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 CDC, or to inform other Regulatory Bodies of the suspension. Respondents receiving a suspension may qualify for reinstatement to use the CeFT® mark or designation by written approval signed by the CDC Chair.

7.4       CeFT® Revocation

The CDC may permanently revoke or bar the Respondent’s right to use the CeFT® mark and designation. 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 CDC, or to inform other Regulatory Bodies of the revocation or bar.

7.5      Action upon Suspension or Revocation

Upon entry of an order of revocation or suspension, the Respondent shall immediately terminate any use of the CeFT® mark and designation in all facets of business, including advertising, business cards, websites, etc. Failure to comply with a suspension will result in an automatic revocation of CeFT® certification.

7.6      Voluntary Relinquishment

Voluntary relinquishment of a Respondent’s CeFT® mark or designation shall not take effect until after the CDC issues its final order, decision, or findings in any investigation or proceeding. As such, even if the Respondent voluntarily relinquishes his/her CeFT® certification, the Hearing Officer, CDC, and FTI retain jurisdiction over the Respondent until any investigation or proceeding concludes, as determined by the CDC.

Section 8

PLEADINGS AND SUBMISSIONS

8.1       Complaint or Notice of Investigation

FTI shall prepare a written Complaint or Notice of Investigation outlining the allegations against the Respondent and provide the Complaint or Notice of Investigation to the Respondent by certified U.S. mail to the Respondent’s last known address. Additional copies of the Complaint or Notice of Investigation may be provided as a courtesy by any other means of correspondence at the discretion of FTI. A Copy of the Complaint or Notice of Investigation shall be included with the materials provided to the Hearing Officer in advance of the hearing. The Complaint or Notice of Investigation shall reasonably set forth the grounds for discipline with which the Respondent is charged and the conduct or omission that gave rise to those charges.

8.2       Answer

The Respondent must file a written Answer to the Complaint or Notice of Investigation with FTI within thirty (30) calendar days from the date of service of the Complaint or Notice of Investigation on the Respondent. The Answer must be sent by certified U.S. mail to the office of FTI, absent a written agreement to accept the filing by another method. It is the Respondent’s sole responsibility to ensure that FTI has received the Answer. A copy of the Answer shall be included with the materials provided to the Hearing Officer in advance of the hearing. In the Answer, the Respondent shall respond to every material allegation contained in the Complaint or Notice of Investigation and set forth any defenses or mitigating circumstances. The Respondent may attach documents to support the Answer.

8.3       Length

Absent written permission from FTI or the CDC, Respondent’s Answer is limited to twenty (20) pages and attachments should be limited to only those items responsive to the allegations. 

8.4       Default

If the Respondent fails to file an Answer within the applicable time period, the Respondent shall be deemed to be in default, and the allegations set forth in the Complaint or forming the basis for the investigation shall be deemed admitted. A default may result in suspension or revocation, at the sole discretion of FTI.

8.5       Request for Extension or Continuance

A Respondent may request an extension to file an Answer. Upon receipt of the request, the Hearing Officer shall either grant or deny the request, in his or her sole discretion. Extensions and/or continuances are generally disfavored by FTI.

Section 9

DISCOVERY AND EVIDENCE

9.1       Discovery

Following service of a Complaint or Notice of Investigation against a Respondent, the Respondent may obtain copies of non-privileged, non-protected documents in the Respondent’s disciplinary file that are relevant to the allegations in the Complaint or Notice of Investigation. Requests for such documents must be made in writing and directed to FTI. Materials obtained through such a request must be held in the strictest confidence, and may not be used by the Respondent or third parties for any purpose outside of the investigation or proceeding for which they are obtained.

9.2      Witnesses

Because the Respondent is not afforded an in-person hearing, any statements by any witnesses must be provided in the form of a written and sworn affidavit, and attached to the Answer or a motion. Witnesses must be clearly identified, with contact information, and submission of a witness statement grants the Hearing Officer permission to contact that witness in the presence of the Respondent or Respondent’s representative.

9.3       Representation by Counsel

Should the Respondent wish to retain counsel, such counsel must be identified to FTI in the Respondent’s Answer or as soon thereafter as counsel begins representation. Upon such identification, all correspondence and communication between FTI, CDC, or the Hearing Officer and Respondent shall occur through counsel. Counsel must be an active member in good standing of any bar of a state, jurisdiction, or territory of the United States, or the equivalent of any country in which the Respondent resides.

Section 10

MOTIONS

10.1       Motion

Respondent and/or FTI may file a written motion regarding procedural and/or evidentiary matters by Certified U.S. Mail. The motion must state with reasonable particularity the grounds for the motion and the relief sought. If the motion pertains to a specific rule or rules, the motion must identify the rules. The Hearing Officer shall rule on any motion.

10.2       Response to Motion

Respondent and/or FTI may file a written response to any motion. Any response must be filed no later than ten (10) calendar days after the filing of the motion by certified U.S. Mail. No rebuttal is permitted.

10.3       Length

Neither motions nor responses to motions shall exceed ten (10) pages. Attachments should be limited to only those documents directly relevant to the relief requested in the motion.

Section 11

RECONSIDERATION

11.1    Reinstatement After Revocation

The final order or decision of the CDC is non-appealable. A Respondent may, however, file a Motion for Reconsideration once following the guidelines of Section 10, above. Motions for Reconsideration will be considered by the CDC in the same manner as the initial hearing. Only final orders or decisions will be reconsidered, not motions or other findings.

The CDC Chair will name a different Hearing Officer to lead consideration of the Motion for Reconsideration. The new Hearing Officer will review de novo the Motion for Reconsideration, the findings of the previous Hearing Officer, and any further documentation provided to the CDC during the initial consideration of the allegations. The Hearing Officer will then present the evidence to the CDC in the same manner described in Section 5, above. The CDC’s order or decision on a Motion for Reconsideration is final.

11.2    Timing

A Motion for Reconsideration must be made within forty five (45) calendar days of the date of the final order or decision.

Section 12

REINSTATEMENT

12.1    Reinstatement After Revocation

Revocation shall be permanent, and there shall be no opportunity for reinstatement, except where revocation is automatically applied due to revocation of another designation, as provided in Sections 2 and 3. If a Respondent receives an automatic bar due to revocation of another designation, but later receives another qualifying designation, he or she may apply for reinstatement as if the automatic bar was a suspension.

12.2    Reinstatement After Suspension – Request for Reinstatement

A suspended Respondent shall be automatically reinstated upon the expiration of the period of suspension, provided the Respondent files a Request for Reinstatement with the CDC within thirty (30) calendar days of the expiration of the period of suspension. The Request for Reinstatement must include an affirmation that Respondent:

(a) meets all current requirements for CeFT® certification, as they exist at the time of the expiration of the suspension;

(b) has complied with all disciplinary orders or decisions of the CDC;

(c) is fit to use the CeFT® mark and designation; and

(d) was not the subject of any disciplinary action or investigation by any Regulatory Body during the pendency of Respondent’s suspension.

The Request for Reinstatement will be granted or denied at the sole discretion of the then-presiding CDC Chair.

Section 13

CONFIDENTIALITY OF PROCEEDINGS

13.1    Confidentiality

Except as otherwise provided herein, all FTI proceedings and investigations shall be confidential and the records of the CDC, the Hearing Officer, and FTI, as well as all pleadings and submissions of Respondent, shall remain confidential and shall not be made public or provided to any person or entity.

13.2    Exceptions to Confidentiality

Subject to privilege and work product doctrines, FTI may release the pleadings and records submitted during disciplinary investigations or proceedings if the records are subpoenaed by a court or Regulatory Body of competent jurisdiction or if the Respondent has waived confidentiality.

Section 14

GENERAL PROVISIONS

14.1    Quorum

Two-thirds of the members of the CDC must be present in order to constitute a quorum, and the approval of a majority of the quorum shall constitute the action of such CDC.

14.2    Methods of Notice and Service

Except as may otherwise be provided in these Disciplinary Rules, notice shall be in writing and the giving of notice and/or service shall be sufficient when made by certified mail sent to the last known address of the Respondent according to the records of FTI, unless otherwise agreed by the parties in writing. Upon designation of counsel, all communications, including notice and service, shall be made by certified mail to counsel, unless otherwise agreed by all parties in writing.

14.3    Costs

The CDC will assess any and all costs associated with disciplinary proceedings or investigations to the Respondent. In the event that the hearing results in a dismissal of charges or allegations without merit, the hearing costs shall be refunded to the Respondent. The CDC may, in its sole discretion, decide not to assess costs against a Respondent due to financial need or otherwise.

14.4    Publication of Disciplinary Decisions

FTI shall publish the fact of a suspension, revocation or permanent bar, and may identify the Respondent in a press release, on the FTI website, or otherwise as it desires in its sole discretion.

14.5    Requirement of Written Instrument

Any provision herein that requires a notice or communication to be in writing expressly includes email or facsimile.