New Customer Dispute Allegations
We are very much aware of the great many frivolous investor complaints brought by customers (or their lawyers who coach them) in order to score a quick “nuisance settlement” from the firm. In eight out of ten of these new client disputes, your firm will be looking to settle with your client to avoid litigation. It’s simple — it almost always costs more to litigate than to just cut a nominal check and leave you with a new Customer Dispute disclosure or your U5 Disclosure on your BrokerCheck, IAPD, and ADV.
These new investor complaints typically bring several of the following accusations against you:
- Unauthorized trading
- Breach of fiduciary duty
- Breach of contract
- Material misrepresentation or omission
- Failure to supervise
- Violation of Rules, acts, or laws
Conflict of Interest in Representation?
When a new investor complaint arises, most broker-dealers and RIA’s will provide the financial advisor with in-house counsel or contract out to a law firm to defend against the investor allegations. If you conduct a bit of due diligence, you are likely to find that broker-dealers select to defend their advisors are also their legal defenders who represent investors in bringing these meritless claims against advisors.
Be careful and be aware. Whose interests your legal defender represents who was provided by your company is something you have a right to know. They will tell you that they represent the broker-dealer’s interest, not yours. You have to choose a representative who has aced the FINRA exam and will be your representative for a robust FINRA dispute resolution or to your FINRA Disclosure Expungement
MAH Advising only has one interest in mind: you.
Threatened U5 Termination
Allegiances fade quickly. Do not let your firm use a U5 disclosure as leverage or a weapon to retain your clients.
If you were terminated by your broker-dealer or RIA, or you know that a U5 expungement or termination is imminent, hiring MAH Advising now is critical to ensuring that your interests are represented. And if your firm is alleging regulatory or firm policy violations, this may be merely the first of many dominoes to fall in a much larger FINRA or SEC enforcement investigation.
We can help address the following factors of concern:
- Current notes payable to the firm
- Defamatory allegations entered on your U5 disclosure
- Broker Protocol or non-compete issues
- Misrepresentation of the scenarios regarding your departure
- Incorrect dispositions that are misleading as to which side initiated leaving
- Enforcement investigation due to allegations
- U5 termination disclosure now displayed on BrokerCheck and the IAPD
Your chance of continued employment in the financial services industry will be at risk because of FINRA or SEC enforcement, as well as potential employing firms, will have serious issues, and be hesitant to hire, advisors with any form of U5 termination disclosure other than “voluntary.”
Negotiating these finer points on the nature of a potential U5 termination disclosure now, instead of trying to clean them up down the road, will save you money and headache.
Disclaimer: We are consultants, not lawyers, this is not legal advice. We work with the top law firms when the practice of law is required.