Navigating Form U5: What You Need To Know As A Departing Advisor

As a financial advisor, leaving your job requires that the firm file a Form U5, also known as the Uniform Termination Notice for Securities Industry Registration. The form U5 is the mechanism through which the firm severs its relationship with you, separating your registration from the firm’s registrations.

At AdvisorLaw, we understand the importance of Form U5 language and the potential harm that can come to your reputation from a weaponized Form U5. Here’s everything you need to know about the form and its potential impact on your career.

When does the firm file a form U5?

A Form U5 must be filed both when an advisor is fired from a position and when advisors voluntarily leave or are encouraged to resign. The form must be filed within 30 days of termination and even in the unfortunate event of the advisor’s death during employment with the firm.

3 Types Of Forms U5

  1. Full Form
    This type of form is required when you are terminated from the firm, resulting in the termination of registration with all jurisdictions and self-regulatory organizations (SROs).
  2. Partial Form
    This type of form is used when you are terminated from only certain jurisdictions and SROs, but the reasoning behind the termination is not included — for example, when you no longer have clients in a specific state and choose to drop that state registration.
  3. Amendment Form
    This type of form is used when information is updated or amended, including changes in address.

The Importance Of Form U5 Language

Any negative information included on the form can significantly impact your reputation and career. And firms don’t always fill out the form truthfully. It’s unfortunate that some firms retaliate against departing advisors by writing negative language or defamatory allegations on their Forms U5. This can have serious consequences for the advisor’s career prospects, as well as their reputation. The information provided on Form U5 can be accessed by regulatory and licensing authorities, some of the information is public and can be accessed by potential customers, and it can affect the advisor’s ability to find new employment.

Firms are legally bound to report the reason for termination accurately, and inaccurate or untruthful statements can be challenged by the advisor. While most firms are unlikely to voluntarily amend a Form U5 after its submission, having counsel review the specifics and try to talk with the firm before filing can help ensure the accuracy and truthfulness of the reporting.

What should you do if the language on your Form U5 is inaccurate?

If an advisor is faced with a Form U5 that isn’t factual or fair, they may need to consider expungement through arbitration. The rules and requirements for expungement vary, depending upon the circumstances, and other factors, such as the severity of the offense or incident in question, the amount of time that has passed since the incident occurred, and any prior disciplinary action taken against the individual should be considered before making any decisions.

At AdvisorLaw, we understand how damaging and unfair misleading, or defamatory Form U5 language can be to an advisor’s career and reputation. That’s why we offer services to help amend or remove U5 disclosures from public records, through FINRA arbitration. We can address concerns, such as notes payable, defamatory allegations, The Broker Protocol or non-compete issues, misrepresentation of departure scenarios, and misleading dispositions.

Our experienced securities attorneys can help prepare your case for expungement, gathering and presenting evidence to show that the information contained on your U5 is wrong or slanderous. We will work with you to develop a strategy that addresses the specific circumstances surrounding your termination, protecting your rights and restoring your reputation.

Arbitration is a complex process, and it’s important to have skilled representation on your side to make sure that your case is presented in the strongest way possible. Our attorneys have extensive experience in FINRA arbitration proceedings, and we understand the nuances of the process and the strategies that are most effective in achieving a successful outcome.

We also understand that time is of the essence when it comes to expungement. That’s why we work quickly and efficiently to prepare your case and present it to the arbitration panel so that you can move forward with your career and your life, without the burden of an unfair Form U5 disclosure on your record.

Contact us today!

If you are facing an imminent termination, if you have already been terminated and are facing challenges, or if you are concerned about the impact that a termination will have on your reputation and future career prospects, now is the time to take action. AdvisorLaw can help you navigate the complex and often confusing process of responding to a termination and pursuing expungement or arbitration. With years of experience and a track record of successful outcomes, our team of attorneys can provide you with the guidance and representation you need to protect your livelihood and your reputation.

Contact AdvisorLaw today to schedule a consultation and learn more about how we can help you.

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