Turbeville v. Dep't of Fin. Servs.
| Decision Date | 03 May 2018 |
| Docket Number | No. 1D17–221,1D17–221 |
| Citation | 248 So.3d 194 |
| Parties | Antony Lee TURBEVILLE, Appellant, v. DEPARTMENT OF FINANCIAL SERVICES, Appellee. |
| Court | Florida District Court of Appeals |
John A. Richert of Richert Quarles P.A., Clearwater, for Appellant.
Gregory D. Venz, Deputy General Counsel, Marshawn Michael Griffin, Assistant General Counsel, Department of Financial Services, Tallahassee, for Appellee.
Appellant Antony Lee Turbeville challenges a Final Order of the Department of Financial Services revoking Appellant's insurance license, following the Department's finding that Appellant violated section 626.621(13), Florida Statutes (2015). Appellant argues that: (1) the language of section 626.621(13), Florida Statutes, and the penalty guidelines of Florida Administrative Code Rule 69B–231.090(13) (2015) are ambiguous and should be construed in his favor; (2) that the Department's application of rule 69B–231.090(13) constitutes an ex post facto violation; and (3) that the Department's application of the section 626.621(13), Florida Statutes, to licensees of the Financial Industry Regulatory Authority ("FINRA") violates a licensee's constitutional right to remain silent.
Appellant entered the securities industry in 1987 and registered with several FINRA1 member firms from 1987 through 2015. Among other products, Appellant sold Collateralized Mortgage Obligations, which are complex debt securities that essentially repackage mortgage loans as bonds purchasable by investors.
On December 30, 2009, FINRA filed a six-count complaint against Appellant, alleging violations of the Securities Exchange Act and the National Association of Securities Dealers rules. FINRA's Extended Hearing Panel conducted a sixteen-day hearing and issued its order on May 31, 2012. The Extended Hearing Panel found that Appellant intentionally or recklessly misrepresented the risks of the Collateralized Mortgage Obligations and sold them to elderly and unsophisticated investors. From July 2005 to July 2007, Appellant, his colleague, and their firm earned approximately $492,500 in commissions from seven customers who lost approximately $1.6 million as a result of Appellant's transactions. The Extended Hearing Panel further found that Appellant, along with two colleagues, violated section 10(b) of the Securities Exchange Act and rule 10b–5 thereunder, and violated FINRA rules 2120 and 2110, and this decision barred Appellant from associating with any FINRA-regulated firm in any capacity.
Appellant appealed this decision to the National Adjudicatory Council ("Council"), FINRA's appellate panel, on June 12, 2012. The Council affirmed the Hearing Panel's factual findings and the sanctions on April 16, 2015.
On April 19, 2016, the Department filed a one-count complaint against Appellant, alleging a violation of section 626.621(13), Florida Statutes. An informal hearing was held pursuant to section 120.57(2), Florida Statutes, as Appellant conceded there were no material facts in dispute. The Department's hearing officer filed his Written Report and Recommended Order, stating the following conclusions: (1) the National Adjudicatory Council's decision of April 16, 2015 constituted final disciplinary action by FINRA, and final agency action under state law, pursuant to section 626.621(13), Florida Statutes ; (2) Appellant violated section 626.621(13), Florida Statutes ; and (3) under Florida Administrative Code Rule 69B–231.090(13), the penalty to be imposed is the highest identical penalty imposed by a national securities association upon which the statutory violation is based, which was the revocation of Appellant's insurance license. The Department issued its final order adopting the hearing officer's findings of fact, conclusions of law, and recommendation, and the Department revoked Appellant's license.
We review issues of statutory interpretation de novo. Sullivan v. Fla. Dep't of Envtl. Prot. , 890 So.2d 417, 420 (Fla. 1st DCA 2004).
Administrative agencies are afforded wide discretion in the interpretation of a statute which they administer, but appellate courts are not required to defer to an unreasonable statutory interpretation. Id. "If the agency's interpretation is within the range of possible and reasonable interpretations, it is not clearly erroneous and should be affirmed," Florida Dep't of Education v. Cooper, 858 So.2d 394, 396 (Fla. 1st DCA 2003), but " ‘judicial adherence to the agency's view is not demanded when it is contrary to the statute's plain meaning.’ " Werner v. Dep't of Ins. & Treasurer, 689 So.2d 1211, 1214 (Fla. 1st DCA 1997) (quoting PAC for Equality v. Dep't of State, Fla. Elections Comm'n , 542 So.2d 459, 460 (Fla. 2d DCA 1989) ). Statutes providing for revocation or suspension of a license to practice "are deemed penal in nature and must be strictly construed, with any ambiguity interpreted in favor of the licensee." Beckett v. Dep't of Fin. Servs. , 982 So.2d 94, 100 (Fla. 1st DCA 2008) (quoting Elmariah v. Dep't of Prof'l Regulation, Bd. of Med. , 574 So.2d 164, 165 (Fla. 1st DCA 1990) ). But " ‘[w]hen the statute is clear and unambiguous, courts will not look behind the statute's plain language for legislative intent or resort to rules of statutory construction to ascertain intent.’ " Borden v. East–European Ins. Co. , 921 So.2d 587, 595 (Fla. 2006) (quoting Daniels v. Fla. Dep't of Health , 898 So.2d 61, 64 (Fla. 2005) ).
Section 626.621, Florida Statutes, as it read at all times pertinent here,2 provided:
Florida Administrative Code Rule 69B–231.090 describes specific penalties for violations of section 626.621, Florida Statutes :
Appellant argues that the statute and rule are ambiguous, because neither provide guidance for what date should be used to compute penalties under section 626.621(13), Florida Statutes, or more specifically, whether the Extended Hearing Panel's or the National Adjudicatory Council's decisions constitute "final agency action" as described in the statute. Therefore, Appellant argues, the statute must be construed in favor of Appellant, which would define the Extended Hearing Panel's decision on May 31, 2012, as the final agency action and ultimately result in an impermissible ex post facto application of Florida Administrative Code Rule 69B–231.090(13), because Appellant's violation occurred before the rule was promulgated on March 24, 2014.
Interpretation of FINRA's rules is exclusively a federal question. See Turbeville v. Fin. Indus. Regulatory Auth. , 2016 WL 501982 (M.D. Fla. Feb. 9, 2016) (). Federal circuit courts have held that "[t]he NAC's decision (or the Hearing Panel's decision if there was no appeal) is FINRA's final action unless FINRA's Board of Governors calls for review." Scottsdale Capital Advisors Corp. v. Fin. Indus. Regulatory Auth., Inc. , 844 F.3d 414, 418 (4th Cir. 2016). Further, "[a]n appeal to the National Adjudicatory Council from a decision issued pursuant to Rule 9268 or Rule 9269 shall operate as a stay of that decision until the National Adjudicatory Council issues a decision pursuant to Rule 9349 ...." FINRA Rule 9311(b).
Thus, the Extended Hearing Panel's decision is final unless appealed to the National Adjudicatory Council. If appealed to the Council, the decision is stayed.
Appellant argues that section 626.621(13), Florida Statutes, is ambiguous, because it does not specify whether the decision of the Extended Hearing Panel or of the National Adjudicatory Council should be used for penalty calculation. This argument incorrectly implies that two parallel decisions co-exist and that the Florida Statutes must differentiate them. On the contrary, as stated above, the Extended Hearing Panel's decision only becomes effective if it is not appealed; if appealed, it is stayed until the National Adjudicatory Council makes a decision, which then becomes FINRA's final action. At no time during the procedure do two countervailing decisions co-exist simultaneously; thus, there is no need for section 626.621(13) to specify which decision should be relied upon.
Appellant also argues that section 626.621(13), Florida Statutes, is ambiguous, because it applies to "any decision ... by any ... national securities ... association." (Emphasis added.) But this court has found that the Florida Office of Financial Regulation was permitted to apply a statute very similar to the...
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...for legislative intent or resort to rules of statutory construction to ascertain intent." See, e.g. , Turbeville v. Dep't of Fin. Servs., 248 So. 3d 194, 196 (Fla. 1st DCA 2018) (quoting Borden v. East–European Ins. Co. , 921 So.2d 587, 595 (Fla. 2006) ). Section 551.102(4), defines an "eli......