Turbeville v. Dep't of Fin. Servs., No. 1D17–221

CourtCourt of Appeal of Florida (US)
Writing for the CourtB.L. Thomas, C.J.
Citation248 So.3d 194
Parties Antony Lee TURBEVILLE, Appellant, v. DEPARTMENT OF FINANCIAL SERVICES, Appellee.
Decision Date03 May 2018
Docket NumberNo. 1D17–221

248 So.3d 194

Antony Lee TURBEVILLE, Appellant,
v.
DEPARTMENT OF FINANCIAL SERVICES, Appellee.

No. 1D17–221

District Court of Appeal of Florida, First District.

May 3, 2018


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.

B.L. Thomas, C.J.

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.

248 So.3d 196

Facts

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.

Analysis

1. Is the language of section 626.621(13), Florida Statutes (2015), or Florida Administrative Code Rule 69B–231.090(13) ambiguous?

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

248 So.3d 197

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:

The department may, in its discretion ... revoke ... the license ... of any ... agent ..., and it may suspend or revoke the eligibility to hold a license ... of any such person, if it finds that as to the ... licensee ... any one or more of the following applicable grounds exist under circumstances for which such ... revocation ... is not mandatory under s. 626.611:

....

(13) [The licensee has] been the subject of or has had a license ... or other authority to conduct business subject to any decision ... by any ... national securities ... association involving ... a violation of any rule or regulation of any national securities ... association.

Florida Administrative Code Rule 69B–231.090 describes specific penalties for violations of section 626.621, Florida Statutes :

If it is found that the licensee has violated any of the following subsections of Section 626.621, F.S., for which ... revocation of license(s) ... is discretionary, the following stated penalty shall apply:

....

(13) Section 626.621(13), F.S.—

(a) The highest identical penalty to the penalty imposed by the ... national securities ... association or, if not available, the highest substantially similar penalty to the penalty imposed.

1. A revocation, removal, lifetime prohibition, lifetime bar or lifetime ban, or the equivalent, or any suspension with a duration greater than 24 months, shall result in revocation; and

2. A suspension with a duration of less than 24 months, shall result in a suspension of equal length.

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

248 So.3d 198

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) (holding removal to federal court was proper where Tuberville's pleading required court to interpret FINRA's rules). 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....

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1 practice notes
  • Fla. Thoroughbred Breeders' Ass'n, Inc. v. Calder Race Course, Inc., No. 1D18-4660
    • United States
    • Court of Appeal of Florida (US)
    • September 25, 2019
    ...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......
1 cases
  • Fla. Thoroughbred Breeders' Ass'n, Inc. v. Calder Race Course, Inc., No. 1D18-4660
    • United States
    • Court of Appeal of Florida (US)
    • September 25, 2019
    ...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......

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