Securities Employment and Transitions

Changing employers in the securities industry can sometimes be the hardest thing to do, especially if you are a retail financial advisor or sought after analyst or dealmaker. There can be battles over clients, restrictions to overcome in non-compete clauses, and garden leaves to contend with. You need experienced New York Securities Employment Lawyers to navigate this tricky and dangerous landscape.

Moreover, the grass always seems greener at a new firm, but is the new firm willing to put all their promises in writing? Malecki Law frequently hears about the false representations and fraudulent inducement of a financial advisor to move his or her book of business to another firm with big upfront bonuses at different asset transfer marks, only to experience broken promises around branch commitments, staffing, assistants and the like – making them unable to hit back-end bonuses.

The NYC Securities Employment Attorneys at Malecki Law are skilled in counseling clients through the many securities industry employment issues during employment transitions to proactively avoid lost business, FINRA regulatory involvement, litigation or actions being instituted against current and former employees. This includes, but is not limited to, representation in:

• Transitions between brokerage firms and RIAs
  • This involves moving client accounts in a legal and ethical way without breaking privacy laws. For other professionals, this means not taking trade secret information, models, or methodology
• Employment Contract Negotiation
  • You may want to proactively deal with employment restrictions at your current employer as you are leaving, and you need to document the promises by your new employer.
• Restrictive Covenants including stock options and grants, signing bonuses, guarantees, compensation formulas for “good cause”, termination provisions, and other unique issues
  • Employment contracts in the financial services industry often included restricted covenants restricting or prohibiting an employee’s right to take certain actions both during and after the employment relationship. Employment contracts often include non-competition and non-solicitation clauses that prevent an employee from competing with or soliciting clients from their previous firm. Compensation arrangements in the financial services industry often include components like upfront bonuses and stock options, which can be impacted when an employee transfers to a new firm. Before making an employment transition, financial professionals should consult seasoned Securities Employment Counsel, like Malecki Law in New York City.
• Promissory Note and Forgivable Loan Defense
  • You need to deal with any unpaid balance to the firm you are leaving (and this could include an arbitration involving employment related issues). Firms will pursue you for unpaid balances and you need to either fight back, pay it or negotiate a payment plan. Malecki Law’s securities industry employment lawyers are skilled in getting the best deals possible for its clients.
• Cooperation in Criminal, Civil, Regulatory and Self-Regulatory Matters
  • If you receive a subpoena or request for information in a regulatory matter or a court case, you should strongly consider consulting counsel to determine the optimal way to respond to the subpoena or request for information. Malecki Law’s team of experienced attorneys routinely aids financial professionals in responding to subpoenas and requests for information.
• Wrongful Termination and Constructive Discharge
  • Because securities industry professionals utilize FINRA Dispute Resolution’s arbitration forum for brokerage disputes and generally Registered Investment Advisors (“RIAs”) use the American Arbitration Association (“AAA”), many securities employees, even in at-will states, can bring actions for wrongful termination and be heard regarding what they feel was done wrongfully by their employer. That could be statutory discrimination and/or harassment claims but could also involve the firm’s disparate treatment of a professional who is terminated or forced to leave with no good reason or a pre-textual false reason.
• Compensation, Bonus and Commission Claims
  • A trick in the industry to boost certain bonuses is to eliminate people in the pool before bonuses are paid. Most firms require that you be employed and in good standing to receive a bonus, even though it already may have been earned. Many states, like NY, are protective of compensation issues as it relates to employment and a skilled securities employment arbitration lawyer like those at Malecki Law can navigate these arguments to work at getting that bonus paid.
• Assisting in the Writing of Reporting Requirements for Forms U-4, U-5, & Disclosure Reporting Pages (“DRPs”)
  • When you get that feeling that something is not right, an investigation is going on regarding something or you have JUST been terminated, get a securities industry lawyer to intervene to help obtain the best possible language for your Form U5 before it is too late. Once the Form U5 is filed, it will ordinarily take an arbitration to change it and that could take up to two years.
• Dodd-Frank Whistleblower Cases
  • In July 2010, the United States government passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. This reform aims for increased public watch and censure of misconduct in state and national economic affairs. Dodd-Frank takes precise strides to protect the whistleblowers within the finance industry, as well as compensate anyone who believes that they know of wrongdoing, regardless of whether they worked for or with the company or not. Our whistleblower attorneys in New York can guide you in filing a tip. Even rumors, if they can be substantiated, could generate a whistleblowing award, up to 30% of a total recovery greater than $1,000,000.
• Severance Package Termination Agreements
  • An old adage is true with severance packages: “you don’t get what you don’t ask for.” You have the right to have a lawyer review any documents a firm requests that you sign. That lawyer has the right to suggest changes and modifications, including the dollar amount. Malecki Law’s employment lawyers stand ready to help negotiate severance packages and termination agreements. The firm has a lawyer and so should you.

Our securities employment law firm in New York will provide representation to a variety of industry participants in employment and securities intra-industry matters, including professionals from all areas of a brokerage firm and RIA, registered investment advisor.

A lot of people do not want to admit that it is time to end the “bad marriage” they are in with a brokerage firm or registered investment advisor. Too often, an employee’s desire to “get it done,” “just help” or “tell them everything” – expecting a fair response – leads to a manipulated firm or customer response not in their favor. Any New York regulatory attorney will tell you, being innocent is not enough^[1].

However, when you have a gut feeling that people are not “with you,” you have to take proactive steps to document and prepare for the possible issues coming down the pike. You need to ensure that the firm’s lawyers know that you have lawyers of your own that are monitoring and interacting in the process. Your career may not have time for an expungement arbitration. Even a new employer can pull out of their offer and terminate you. You will find it hard to get a new job.

¹ From “securities industry employees” - https://www.aboutsecuritieslaw.com/securities-industry-participants.html