Securities Employment Advice - Transcript

In the securities industry, employment transitions—whether voluntary or involuntary—are complex and require swift, strategic action. If you are considering moving from one broker-dealer to another or have been terminated, it is critical to consult legal counsel immediately. At Malecki Law, we provide tailored advice to help financial professionals protect their careers, comply with industry rules, and avoid costly mistakes.

Time is of the essence when navigating employment changes in the securities industry. Whether you are preparing to leave a broker-dealer or facing termination, early legal intervention can make all the difference.

1. Voluntary Transitions:
   • Moving from one broker-dealer to another involves navigating a web of contractual obligations and regulatory requirements. Compliance manuals, non-compete clauses, and rules regarding client information must be carefully reviewed to ensure you are not violating any agreements.
   • Mishandling client transitions can lead to serious consequences, including marks on your Form U5, regulatory scrutiny, or even litigation. For example, improperly transferring client information or failing to follow firm protocols can result in allegations of misconduct.
2. Terminations:
   • Many terminations follow internal investigations, during which you may have already submitted documents or statements to the firm. At that stage, it is imperative to have legal counsel representing your interests.
   • Firms have their own lawyers, and FINRA operates with a team of attorneys. It is essential to remember that these attorneys represent the firm—not you. Without your own legal representation, you are effectively pro se, negotiating directly with experienced lawyers in a highly regulated industry.

The securities industry is governed by strict rules and regulations regarding employment transitions and terminations. Failing to address these rules can lead to significant career setbacks. Common pitfalls include:

• Mismanagement of Client Information: Client data is considered proprietary to the firm. Attempting to move client information without authorization can result in regulatory violations or lawsuits.
• Non-Compete and Non-Solicitation Violations: Many broker-dealers include restrictive covenants in employment agreements. Violating non-compete or non-solicitation clauses can lead to legal disputes.
• U5 Marks and Investigations: If your Form U5 contains negative remarks, it can severely damage your professional reputation. Once an adverse mark is made, FINRA or the SEC may initiate an investigation that could have long-term consequences for your career.

Whether you are being terminated or planning to leave a firm, retaining experienced legal counsel is essential. At Malecki Law, we:

• Review Employment Agreements: We carefully examine your contracts, compliance manuals, and non-compete clauses to identify potential risks.
• Advise on Client Transitions: We help you strategize how to move your book of business without violating industry rules or firm policies.
• Defend Against Terminations and U5 Marks: If you are facing termination or have already received a negative mark on your Form U5, we advocate aggressively to mitigate the damage and protect your career.
• Assist During Investigations: If a firm investigation is underway, we ensure your rights are protected before you submit any statements or documents.

Proactively addressing employment transitions or terminations is the best way to avoid costly mistakes and preserve your professional future. At Malecki Law, we understand the nuances of securities employment law and work closely with our clients to develop effective strategies tailored to their specific circumstances.

If you are transitioning between firms, facing termination, or concerned about regulatory issues, contact Malecki Law at (212) 943-1233 or reach out online to schedule a consultation. Our team is here to provide the advice and representation you need to protect your reputation, your book of business, and your livelihood.

Transcript:

If you are thinking about a transition from broker dealer to broker dealer or if you’ve been terminated you need to act very fast.

In fact you should be you should have had a lawyer already if either you’re being terminated or you’re leaving.

If you know you’re leaving there are so many complex rules relating to client transitions, you have contracts and compliance manuals with broker-dealers that talk about non-compete. You know client information, trademark secrets, client information that needs to be kept at the firm and not transitioned.

And so you really need to make sure that you’re checking all the boxes and not doing anything wrong because if you do it wrong you may get another mark on your form u5.

If you are being terminated it is highly likely that it is not out of the blue and that you knew there was an investigation going on.

You should have hired a lawyer at the time that the investigation began, before you submitted anything in writing to the firm.

The firm has lawyers FINRA has lawyers you need, a lawyer as well because they are going to tell you right off that their lawyers are not representing you they’re representing the firm.

That means you are pro se dealing directly with a lawyer which is not a very good place to be in in a highly regulated industry.

So it’s very important to retain counsel during transitions from either terminations or deciding to leave a firm and move, and you gonna you think you’re gonna move your book of business. You need to know what is ahead and you need to strategize on the best way to do it.