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  1. #1
    Join Date
    Jan 2013
    Posts
    2

    Default When Can You Get FINRA Arbitration Over Being Fired

    My question involves labor and employment law for the state of: Florida.

    As a Series 7 licensed individual, I have been a "dual" employee for many years of Bank ABC and Broker DEF with the bank as primary employer. I never had any major issues until I started being subjected to inept management, arrogant behaviour and overall an unhealthy work environment where a series of disciplinary actions were taken against me based either on false accusations or reasonable errors. The working environment had become so untenable that I offered my resignation verbally to my manager's boss. After a transfer could not be secured due to the negative "wrap sheet" stacked up against me, I was terminated.

    I am aware of the at-will employment doctrine in Florida. The problem is since I was terminated, my secondary employer Broker DEF has to file a U5 with FINRA, the federal regulatory authority overseeing Securities Professionals with Series 7 licenses. I was never able to actively use my Series 7 license during my tenure because I was primarily an employee of the bank and was not allowed to provide investment advice. They did mention that it was a nonetheless a benefit for me to "hang" my license with their broker affiliate so it doesn't expire. In hindsight, I'm beginning to realize that it was now a disadvantage because the U5 information is public and can affect my chances of finding future opportunities in the financial services industry.

    I am a personal of moral integrity and too quick to admit any mistakes I may have made as an employee to management. It would be customary for me to see other people violating policy and getting ahead and I would think to myself "that bad karma will come back on them." But those individuals who were never caught or had good relationships with their managers are still employed which I find quite ironic and maybe I am the one who has to reassess my own personal management policies to avoid being a victim myself. I refuse to be a whistle blower but somehow I feel this might be the only option to defend myself.

    The lawyer I have spoken to about this matter who normally represents brokers against employers said that he could not help me because the wording on the U5 would be hard to modify since it specifically says it is not "sales related" and only due to [my] "failure to follow bank affiliate's policy." If he cannot defend me during the FINRA arbitration process that I am bound to as a "dual" employee then I am left wondering if I should pursue this matter further as unfair as it may seem because the U5 statement clearly undermines my professional work ethic and otherwise excellent operational record as an employee and affects my prospects for employment elsewhere. It seems that what needs to happen is for me to drop my FINRA arbitration claim, allow my Series 7 license to expire and never again look for positions as a Series 7 registered representative even though no complaint has ever been filed against me and I have rarely used my license.

    My legal question is:
    1) Do I have grounds to claim that I had offered my resignation first before I was terminated to avoid the U5 from being filed?
    2) If I find other "dual" employees with a similar situation, can I file a class action suit? Will this allow me to exit the FINRA arbitration requirement?
    3) Does anybody know a FINRA arbitration attorney that I can also consult about this issue?

    Thanks,

    consigliere

  2. #2
    Join Date
    Sep 2005
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    Default Re: When Can You Get FINRA Arbitration Over Being Fired

    Quote Quoting consigliere
    View Post
    The working environment had become so untenable that I offered my resignation verbally to my manager's boss. After a transfer could not be secured due to the negative "wrap sheet" stacked up against me, I was terminated.
    You need to do a better job explaining what happened. You went to your boss and said "I quit". They then said, "If we can find you another position will you stay"? Or what? And then, when they couldn't find another position they accepted your resignation? If you resigned, you weren't fired. It's important to be clear and accurate in your facts.
    Quote Quoting consigliere
    The problem is since I was terminated, my secondary employer Broker DEF has to file a U5 with FINRA....
    And that's a problem because... ? I guess we're back to the nebulous facts you offered. We don't know if you resigned or were fired. How about telling us what the broker proposes to put on the FINRA form in relation to your leaving the bank job, and how that proposed report would be inaccurate. Are we supposed to infer that the broker marked down that the bank "discharged" you for "failure to follow [its] policy"? If so, is that inaccurate and in what way?
    Quote Quoting consigliere
    1) Do I have grounds to claim that I had offered my resignation first before I was terminated to avoid the U5 from being filed?
    If we are to infer from that question that you did not in fact resign, but were fired for violating bank policies, then no. The fact that you previously offered to resign but did not will not change the circumstances of your termination.
    Quote Quoting consigliere
    2) If I find other "dual" employees with a similar situation, can I file a class action suit? Will this allow me to exit the FINRA arbitration requirement?
    A class action suit against whom, for what?

  3. #3
    Join Date
    Jan 2013
    Posts
    2

    Default Re: When Can You Get FINRA Arbitration Over Being Fired

    Mr. Knowitall:

    As I tried to respond to your post, I realized I can't really be more specific without compromising my anonimity. To simplify the matter, let's assume hypothetically that I was terminated with cause. Nevertheless, the most important aspect of my case would be the fact that I never broke any laws and was never actively engaged in securities advise to customers. No customer complaint regarding securities could have ever been placed against me for this reason. More specifically, I was not ALLOWED to use my securities license (FINRA Series 7) at all. The bank had mentioned that they could "hang" my Series 7 license with their broker affiliate so that I did not have to lose it if I did not use it after a period of time. At the end, the fact that I was terminated was also reflected by the broker affiliate who has to file a form U5 with FINRA (see http://www.finra.org/web/groups/indu...cs/p119944.pdf). Per FINRA's rules (see http://www.finra.org/Industry/Compli...ilingGuidance/), there must be a reason stated if there was a full termination. My interpretation of this rule is to provide proper public disclosure to customers who would like to check the background of a licensed securities professional. However, in my case, during my tenure with the Bank, I was never involved in securities and the reason showing in my U5 filed by the broker affiliate questions my credibility and professionalism. In turn, the reason stated affects my prospects of finding future employment in the financial services industry. I hope this explains it better.

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