If you are a registered representative and intend to transfer to another firm, have been terminated, or need an expungement, Western Heritage Law Group can help you.
Form U5 is the Uniform Termination Notice for Securities Industry Registration used by firms to report information about the registered representative, such as a termination.
According to FINRA rules and guidelines, Form U5 must be filed within 30 days of the event, such as the registered representative’s departure from the firm, and a copy must be sent to the registered representative. Firms must check one of the five boxes on Form U5, such as “Voluntary,” “Deceased,” “Permitted to Resign,” “Discharged,” or “Other.” If the broker-dealer checks “Permitted to Resign,” “Discharged,” or “Other,” it must also explain the circumstances that triggered the departure.
Form U5 follows the registered representative wherever he/she goes. Any accusation of misconduct, disparaging or unflattering language can and will prevent the registered representative from finding another job in the industry and make it difficult to attract clients. Unfortunately, some firms abuse this process and use the explanation language to defame the registered representative and retain his/her clients.
Before Form U5 is filed, the registered representative should retain an attorney to discuss and negotiate the language the firm intends to publish to alleviate negative or potentially harmful language.
Once the language has been published, the only way to modify or have it deleted in its entirety is through an expungement proceeding at FINRA and directed to do so by a panel in an arbitration award.
Employment-related or “intra-industry” disputes are not subject to the expungement provisions of FINRA Rules 2080, 2081, 12805, and 13805, which are FINRA rules that typically govern expungements of customer complaints.
The broker has to prove that the Form U5 language by the firm is defamatory in nature, misleading, inaccurate, or erroneous. See NASD Notice 99-54.
Customer-dispute information can only be expunged if the claims, allegation, or information is factually impossible or clearly erroneous, the registered representative was not involved in the alleged investment-related sales practice violation, forgery, theft, misappropriation, or conversion of funds or the claim, allegation or information is false.
Western Heritage Law Group has helped many registered representatives negotiate Form U5 language with firms and is successful in expungement proceedings.