Any time a rep leaves a firm, they are required to file a Form U5 describing the circumstances under which the rep departed.
On this week’s Ask An AdLaw Expert, we talk with AdvisorLaw Founder and President, Doc Kennedy, MBA, J.D. about how firms typically determine the type of termination that will be reported on an advisor’s public record.
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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.
AdvisorLaw also provides all relevant transition services for advisors making a voluntary or involuntary move. If you ever find yourself under internal or regulatory investigation, our team can provide expert counsel to defend your good name.
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Well when an advisor is terminated, the firm terminating the advisor, or the firm with which the advisor is affiliated, populates a Form U5. That Form U5 has a designation for termination type. The types of terminations that are available to choose from when being populated are: (1) voluntary; (2) permitted to resign; and (3) discharged. If the termination is “voluntary,” the firm reporting does not need to populate the box that explains the allegations that the registered rep was accused of prior to or during the time of resignation. However, if it is “permitted to resign” or “discharged,” the Form U5 that is submitted through web CRD requires that the firm outline and summarize what allegations are pending or were against that particular advisor.