FINRA Attorney

Using A FINRA Attorney to Smoothly Part Ways Within the Financial Industry

Using U-5 Forms As a Weapon

Parting ways is never easy, but in the financial industry it brings along an added layer of difficulty. When a financial advisor leaves a firm, for any reason, the U-5 must be submitted within 30-days of the departure. A FINRA attorney will warn advisors that firms may mark a U-5 form in a misleading manner for a number of reasons. But, the resulting defamation or disparagement is a serious violation of the FINRA rules. Using a U-5 as a weapon is actionable and can carry severe sanctions. For example, in Ulrich v. Wharton Whitaker and Eaton Vance Distributors, a NASD arbitration, a financial advisor/broker was awarded $625,000 in actual damages. Plus, he was awarded $1,250,000 in punitive damages and attorneys’ fees because his U-4 and U-5 were improperly marked with defamatory statements. 

Examples of Condemnations

There are other condemnations of using a U-5 form as a weapon to defame or disparage a departing financial advisor. Recently, a FINRA arbitration panel ordered UBS Financial to pay more than $11 million to a market operations supervisor. The FA alleged defamation on his U-5 form. UBS fired Mark Munizzi, the market operations supervisor, in April 2018. He claimed that UBS’ U-5 description of his termination was defamatory and kept him from finding another job in the financial industry. The FINRA arbitration panel agreed. In addition to the award, the panel ordered changing his U-5 to reflect his termination without cause. The award also included compensatory and punitive damages, attorneys’ fees, and interest on a portion of the damages as severance pay.

The Aggressive Use of U-5 Forms

FINRA arbitrators are clearly taking issue with aggressive use of the U-5 form. Firms should caution those employees responsible for U-5 marking to complete the U-5 with accurate information and no other agenda. On the other hand, financial advisors should be proactive in trying to determine how a firm will mark their U-5. They should negotiate with the firm before the filing a U-5, should it appear a misleading mark. FINRA attorneys agree that it’s easier to address inaccuracies before filing a U-5 than to undergo a lengthy expungement process.  In either event, an experienced FINRA attorney can guide a financial advisor through the process. 

Rogge Dunn Group, an experienced FINRA arbitration attorney, has extensive experience working with financial advisors across the country on an entire array of industry issues, including transitioning from prior firms. To contact us about legal issues surrounding the financial industry, click here.

MEDIA

Rogge Dunn Weighs In On Kera News Radio Segment About Janitor Safety During COVID-19
READ MORE
Rogge Dunn Interviewed on NBC DFW About Employment Issues at Denton Living Center with Dozens of Coronavirus Infections
READ MORE
Essential Business Employees: Rogge Dunn Gives Insight on KPRC NBC Houston Regarding COVID-19 Employment Laws
READ MORE
What Employers and Employees Should Know About the Families First Coronavirus Response Act
READ MORE
Wells Fargo Settles Deferred Compensation Lawsuit For $79 Million
READ MORE
Top Employment Law Trends to Watch in 2020 – Insight From an Employment Attorney
READ MORE
D Magazine Publishes Article Written by Rogge Dunn on Creating an Appropriate Work Environment in the #MeToo Era
READ MORE
The Role of the Business Judgment Rule in Shareholder Disputes
READ MORE
How to Avoid and Resolve a Partnership Dispute
READ MORE
Feb. 27, 2020: Rogge Dunn Group to Sponsor and Host Dallas Business Journal 40 Under 40 VIP Cocktail Reception
READ MORE
Do I Need A Trade Secret Lawyer?
READ MORE
Rogge Dunn Group Honored as Elite Trial Lawyers Law Firm of the Year
READ MORE
Do You Need A Financial Advisor Expungement Lawyer?
READ MORE
The EEOC Process and Determining When to Contact an EEOC Lawyer
READ MORE
National Law Journal Names Rogge Dunn Group as Finalist for Five 2020 “Elite Trial Lawyers” Awards
READ MORE
Using A FINRA Attorney to Smoothly Part Ways Within the Financial Industry
READ MORE

Contact Us Today!

Contact us to learn how we can help answer your legal questions.

FILL OUT FORM