The finance industry is cut-throat. No, it’s worse. It’s a blood sport. And part of the game is the “Uniform Termination Notice for Securities Industry Registration” – a.k.a., the U5 form. Often the bane of traders, analysts and advisors everywhere, the U5 form is a document that explains why a “registered representative” leaves or is fired from a finance firm. It’s mandatory and must be filed within 30 days of departure.
U5 forms are regularly at the center of industry-related defamation claims. Typically, finance firms emerge victorious in U5 libel claims.
But not always.
Financial Advisor Wins U5 Defamation Claim
In fact, recently, a FINRA arbitration panel sided with a lone advisor against mega-firm JPMorgan in a U5 defamation case. What happened? Here’s the scoop (in bullet points, for brevity’s sake).
- Two JPMorgan employees regularly set out on the road together for prospective client presentations; one would talk about investment opportunities, the other banking products.
- Even though the pair talked to the same groups on the same days, one wasn’t always in the room when the other person pitched.
- JPMorgan investigated and eventually sacked the advisor who talked on investments for allegedly misrepresenting investor risks during client presentations.
- JPMorgan also fired the second advisor who focused on bank products. She got canned for allegedly failing to report the supposed misstatements of her colleague. (Regulations dictate that certain financial advisors are required to, “say something if they hear something.”)
- According to one of the dismissed employees, JPMorgan allegedly changed her U5 form to indicate illicit activity by way of not reporting her colleague.
- The advisor with the inaccurate U5 form filed a U5 defamation FINRA arbitration complaint.
- After considering both sides, the FINRA panel sided with the ousted advisor over JPMorgan and awarded her about $350,000.
Beating a big firm is not impossible; being a behemoth doesn’t automatically translate into legal superiority.
Speak With A Defamation Lawyer About Your U5 Dilemma
If you’re competing against an inaccurate U5 or termination document, speak with a business defamation attorney. Several lawyers at Kelly / Warner are well versed in finance-related slander and libel.
A boutique law firm, we work closely with our clients to ensure the best possible outcome – and we don’t always take the most traveled path. Devising unorthodox solutions is one our strong-points – and it often lands our clients in the winner’s circle.
It’s time to find a solution that benefits you. Let’s talk about your U5 defamation issue.