A CFP professional has answered a complaint alleging that she borrowed money from an elderly client, and her case is now set for a hearing before a panel of the Disciplinary and Ethics Commission. Her lawyer asks how the panel will decide whether the alleged violation occurred. Which statement correctly describes the burden and the standard of proof at that hearing?
- AEnforcement Counsel must prove the alleged violations by a preponderance of the evidence, that is, that they more likely than not occurred. Correct
- BEnforcement Counsel must prove the alleged violations by clear and convincing evidence, a standard set deliberately above the ordinary civil one.
- CThe respondent must prove that her conduct complied with the Code and Standards, because she controls the client files and the loan records.
- DEnforcement Counsel must prove the alleged violations beyond reasonable doubt, mirroring the standard applied to the criminal side of such conduct.
Why A is correct: Correct: the Procedural Rules place the burden on Enforcement Counsel and set the civil preponderance standard, so the panel finds a violation only where the evidence tips past the halfway point.
Why B is wrong: Tempting because the sanction can end a career, which suggests a heightened standard, but the Procedural Rules adopt the ordinary civil standard rather than the intermediate clear and convincing one.
Why C is wrong: Tempting because the respondent does hold most of the documents and must cooperate with the investigation, but a duty to produce records is not the same as bearing the burden of proof on the merits.
Why D is wrong: Tempting because borrowing from an elderly client can also be prosecuted criminally, but a professional disciplinary proceeding is not a criminal trial and does not import the criminal standard.