WHAT TO DO AFTER BEING HANDED THE FORM U5

On behalf of Girard Bengali, APC on Monday, June 3, 2019.

As Wall Street’s standards continue to change and evolve, many financial advisers in Los Angeles and around the country are being terminated for relatively minor infractions. Once they receive a Form U5, they must come up with a long-term plan for getting back on their feet. While some might be tempted to file a wrongful termination complaint, it is often better to have a Form U5 with favorable language so that they can quickly transition to a new firm.

The Form U5 is the official termination form for professionals who are in the securities industry. It will be added to an individual’s permanent record and filed with the Financial Industry Regulatory Authority, Inc., and that is one of the reasons why it is so important to have the proper language on this form. If the Form U5 claims that the employee was terminated for one or more infractions, then it might be very difficult to find a position at a new firm.

After receiving a Form U5, the adviser should immediately contact an attorney who has experience dealing with these types of issues. Ideally, the Form U5 should claim that the adviser was voluntarily let go or permitted to resign. That type of language will make it much easier to find a solid position with another company.

A securities law attorney who has experience with these types of financial professional misconduct issues can often be an important asset to advisers who are about to receive this type of a FINRA form. Legal counsel can often help negotiate the form’s language so that their clients’ futures in the industry can be protected.