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FINRA Attorneys for Financial Advisors and Brokers

Are you a financial advisor involved in securities litigation with your former employer? If so, the securities attorneys of The White Law Group may be able to help you by filing a FINRA Dispute Resolution Claim.

Unfortunately, financial advisors and other industry professionals can face a variety of legal actions that can affect their ability to change jobs or even continue in their profession.

There may be a clause in your employment agreement that stated that if you ever had an employment dispute with your broker-dealer employer you agreed to waive the right to bring such claim in Court and would instead submit to arbitrating that claim through FINRA’s Dispute Resolution..


In addition to FINRA’s regulatory function, the agency also offers a forum for dispute resolution. This is usually in the context of customer disputes, but it also the forum for most all securities employment related disputes.

Although you have likely waived your right to bring your employment claim in Court, there are actually some benefits to FINRA arbitration.

First, it is generally less costly then bringing the claim in Court. The primary reason for this is that FINRA arbitration strongly discourages the use of depositions (which eliminates the need to pay attorneys to depose every relevant witness in advance of the hearing).

Second, FINRA arbitration is usually quicker compared to Court litigation. Whereas Court litigation can drag on for years, FINRA arbitrations usually take 12-15 months from the date the claim is filed.

Finally, there is a limited right to appeal an arbitration award. As such, if you are able to achieve an award against your former employer for damages, it is unlikely that the brokerage firm can continue to drag out the payment of that award by filing a series of appeals (this is, unfortunately, quite common in Court litigation).


There are numerous causes of action that a broker may bring against his/her employer, including the following:

Wrongful Termination

Essentially, a claim for wrongful termination is an attempt to hold your former employer for terminating you without just cause.

While brokerage firms and financial institutions will go through great lengths to limit their registered representatives from freely moving from employer to employer while retaining their clients, they are quick to remind their brokers that all employment is “at will” and a financial representative can be terminated at any time and for any reason.

Even at will employees do enjoy some statutory protections, however. Most jurisdictions recognize that termination of employment will be wrongful if undertaken for the following reasons: discrimination, retaliation, refusal to take a lie detector test, and if the reason is in violation of public policy. The scope of what is legally “wrongful” however, depends on the statute of the state in which the broker is employed.

Promissory Note Claims

Many brokers receive an upfront payment when they start employment at a broker-dealer. The arrangement may be called a signing bonus, retention incentive, or transitional compensation, but is, in fact, a forgivable loan enforced by the promissory note contract signed by the broker at commencement of employment with the firm.

A broker’s best option upon receiving a demand to pay the balance due on a promissory note obligation is to negotiate the remaining amount owed on the loan and the terms for paying off the debt


An example of retaliation would be your employer terminating you for reporting a securities practice violation of your supervisor. However, retaliation can include any termination in retaliation for some action taken by you that was adverse to your employer, for example, a demotion or transfer in lieu of termination would still be actionable.

Additionally, a retaliation claim can be brought even if the employee is unsuccessful in asserting any other wrongful termination cause of action if the employee can show that the termination or other adverse employment action was the brokerage firm’s response to the employee filing the complaint.

U-5 Defense

A broker’s Form U-5 tracks the occasions and reasons he or she has been let go by a financial firm. As such, it is a key part of the registered representative’s Central Registration Depository (“CRD”) File and a key piece of information any possible future broker-dealer employer will examine when making future hiring decisions.

A misleading or otherwise harmful mark on a broker’s U-5 can have serious and detrimental effects in gaining future employment in the industry. U-5 marks a broker may seek to remove most often fall into one of two categories: a customer complaint lodged against the broker and/or broker dealer, or a mark by the broker-dealer as to the reason for termination.

A broker whose U-5 shows a customer complaint may be eligible for expungement of the complaint from his or her U-5 if the certain circumstances are met. The broker’s U-5 will note any customer complaint lodged against the broker directly, any claims filed against the broker directly, and even claims filed against the broker-dealer without the broker as a named party but in which the broker is the “subject of” the dispute.

Breach of Contract
As part of your termination, you may have been entitled to various types of compensation (deferred compensation, waiver of promissory note obligations, yet to be achieved bonuses, etc.). If your employer wrongfully terminated you, you may also have claims for breach of your agreements with that firm that would have entitled you to additional compensation.
All types of discrimination including age discrimination, gender discrimination, or racial discrimination are protected by Federal statute, and if your termination involved a form of discrimination, you may have a claim for violation of the Federal statute that protects against that specific type of discrimination.
If your employer has defamed you in any way, you would also have a claim for defamation. In the brokerage industry context, defamation usually arises when your former employer misrepresents the reasons for your departure from the firm to your clients in order to induce them to remain with the firm.
Regulatory Inquiry and Wells Notice Response

When FINRA initiates any sort of investigation they will contact the registered persons affiliated with the action or member firm at the heart of the inquiry. See Wells Notice Process Overview

The preliminary portion of the investigation is informal, typically with FINRA or the SEC notifying the registered representative of the duty to supply information in any FINRA inquiry under Rule 8210.

The registered person’s response to this notice is critical in determining how the investigation will unfold, whether or not a formal complaint will be filed, and possibly even what sort of sanction could be meted out if the registered representative is found in violation of applicable rules and regulations.

Any sanction imposed for failure to respond to a FINRA notice is barred from SEC appeal for failure to take advantage of the FINRA process. Having an experienced attorney, knowledgeable of the FINRA process, can help assure a sufficient response and possibly avoid a formal investigation.


The amount of damages you may be entitled to is completely dependent on your specific circumstances, however, the types of damages potentially available include:

Loss of income (i.e. the difference between what you would have made had you remained employed versus the income you are now deriving);

Loss of business (i.e. damages for any clients lost as a result of the wrongful termination);

Deferred Compensation (i.e. any compensation you would have been entitled to had you not been wrongfully terminated;

Waiver of Financial Obligations owed to your former employer (including potentially, the nullification of any outstanding promissory notes); and

Reputational damages (this generally applies to defamation claims and applies to any quantifiable damages resulting from your employer’s defamation of your character).

The foregoing information is a brief overview of some of the types of securities employment litigation involving registered representatives and broker-dealers. If you are a financial advisor involved in securities employment litigation, please call The White Law Group at 888-637-5510 for a free consultation with an experienced securities attorney.