Form U5 Termination Events

Any time a rep leaves a firm, regardless of the reason, the firm is required to file a Form U5 describing the circumstances under which the rep departed, within 30 days of the termination event. When a firm subsequently becomes privy to information that would render a previously-filed Form U5 inaccurate, the firm is obligated to amend the Form U5. 

What happens after you file a Form U5?

Forms U5 are reviewed and relied upon by regulators and self-regulatory organizations, such as FINRA and the SEC, registered investment advisers and broker-dealers, licensing authorities, and prospective customers. Regulatory authorities may choose to contact the rep, firm, or both to obtain additional information about a termination.

Such requests are generally performed through 8210 letters from FINRA. When a rep seeks new employment, the prospective employer will typically look into the facts and circumstances surrounding a past termination. Often, the former employer will be requested to summarize the events in written form. 

What if my Form U5 is incorrect or defamatory?

If you believe that the information on your Form U5 is inaccurate, you can attempt to have the language on your Form U5 amended through FINRA’s expungement process. Each rep is provided with one chance to seek expungement.

To minimize the effects of a Form U5 disclosure, make sure that you act as soon as possible. Inquire with the firm, in writing, about what will be reported. Consider seeking legal advice and employing an attorney to negotiate with the firm on your behalf. Attorneys familiar with the industry can advise you as to the rules that the firm must follow, as well as the process.

Due to the weight that a Form U5 can carry, it’s important to act quickly and proactively and utilize all resources at your disposal. Learn more about our U5 termination and expungement services.