FINRA Attorneys for U-5 Defamation Claims
Are you a financial advisor with an erroneous U-5 entry? Do you need an experienced securities employment attorney to help you clean up your employment record? If so, the U-5 defamation attorneys at The White Law Group may be able to help.
According to the Financial Industry Regulatory Authority (FINRA) By-Laws, under Article V, Section 3, within 30 days after termination of a registered employee’s employment, a member firm must complete and submit a Form U-5 to FINRA and give a copy to the employee. As FINRA has stepped up its regulatory functions in recent years, broker-dealers are now feeling the heat to report everything to assure compliance with both U-4 and U-5 disclosure requirements. This has resulted in brokerage firms disclosing the most innocuous details regarding an employee’s departure from the firm.
These details can have a significant impact on a financial advisor’s ability to find employment with another broker-dealer. Even a simple “Yes” indicating a pending investigation at the time of termination can negatively affect a broker’s ability to get a job with a new firm. Additionally, if these statements are not completely accurate, they may lead to legally viable claims for defamation, wrongful termination, retaliation, or discrimination.
They may also lead to claims to have the improper information “expunged” from the advisor’s U-5. Generally, an arbitration panel can award expungement relief to a financial advisor if the information the member firm provided on an Associated Person’s Form U5 is defamatory, misleading, inaccurate, or erroneous.
FINRA Defamation Claims
Brokers have recently seen some success in arbitration claims against former employers who allegedly used defamatory language in their U5 termination forms. However, legal experts caution that these victories may be more coincidental than indicative of a broader trend favoring brokers in disputes over U5 language. Firms still maintain significant control over U5 forms and can potentially weaponize them against brokers, which can detrimentally impact brokers’ careers.
One notable case involves Mark Munizzi, a former UBS Wealth Management USA supervisory officer, who reportedly won an $11 million arbitration award against UBS in 2019. UBS has appealed the decision multiple times, suggesting their intent to send a message to others considering similar challenges. Recent cases also include Elizabeth A. Bondi, a former Morgan Stanley client associate, who won $63,000 in damages due to defamatory U5 language. However, the UBS has reportedly sought to vacate the decision.
Brokers must negotiate during the 30-day window when U5 forms are filed, as this is when they may have the most leverage. The purpose of U5 language is to protect the investing public and allow them to vet brokers, but brokers should be proactive in negotiating the language to avoid damaging disclosures.
In some cases, brokers may find themselves at a disadvantage as U5 issues can arise after they have left their firms. An example is Lawrence “Casey” Ennis, a New York City broker who reportedly successfully cleared his record after Merrill Lynch alleged U5 violations. Such victories are considered outliers, but they send a clear message to firms to exercise caution in their U5 disclosures.
Hiring a U-5 Defamation Attorney – The White Law Group
If you’re a broker with a detrimental U-5 disclosure, the FINRA attorneys at The White Law Group may be able to help you. For a free consultation please contact our offices at 888-637-5510.
The White Law Group, LLC is a national FINRA law firm specializing in securities fraud, securities arbitration, investor protection, and securities regulation/compliance. Since our establishment in 2010, we have successfully filed over 700 FINRA arbitration cases.
Our firm is dedicated to representing brokers and financial advisors in a wide range of securities-related claims. The causes of action include wrongful termination, promissory note claims, retaliation, U-5 defense, breach of contract, defamation, and regulatory inquiries, among others.
With a wealth of experience exceeding 30 years in the field of securities law, The White Law Group possesses the knowledge and skills necessary to help you. To learn more about our services and how we can assist you, please visit our official website at http://whitesecuritieslaw.com.
Tags: FINRA employment lawyer, securities employment attorney Last modified: March 12, 2024
