My former firm is coming after me for training costs after my resignation. I had no experience in the industry, spent all my time prospecting and quit to go work for a bank just to earn a living. My supposed training amounted to a three week proprietary-product pitch in New York. I got very little training (or even supervision for that matter). Do brokers ever win these things? Should I file a counterclaim? Can I have an attorney in arbitration, or should I go in there alone?
I normally advise against anyone trying to handle a case by themselves. However, if the expense isn't more than what the firm is asking for, you might try paying an attorney for a few hours of advice on how to proceed and then going it alone. Brokers do win these cases, but not often. The main issue is how much of the limited training and lack of supervision you can document (or substantiate with other brokers’ testimony). Your argument is that the amount they’re seeking is unfair based on what they did for you. In essence, you want to argue that they breached the contract with you first by failing to provide you with the promised training/supervision. After hearing more details, an attorney would be able to give you advice on the merits of filing a counterclaim. The amount of damages involved (minimal since you were able to find another job fairly quickly) and the strength of your arguments (was some discrimination involved?) compared with the additional cost of filing a counterclaim all need to be considered. Oftentimes, firms are willing to negotiate a settlement with the broker for a lower amount or a payment schedule or both. There is some benefit to this (even if you have a strong defense) since leaving the decision to arbitrators is always a gamble.
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Plus, why matching clients with brokers of their race, religion or ethnicity might not meet the legal threshold for affinity fraud.
July 1 -
The SEC found that auditing or testing would likely have revealed deficiencies in controls that allowed an employee access to client information at the wirehouse, says leading compliance expert Alan Foxman.
June 22 -
Careful steps need to be taken so FINRA won't consider it an outside business activity, says compliance expert Alan Foxman.
May 24
After the 2008 financial crises, my home went into foreclosure. My mortgage company let me do a short sale and the foreclosure was dismissed. I didn’t realize that this was supposed to be disclosed until my supervisor mentioned it to me recently. I don’t see where, on my U4, this has to be disclosed but before I go back to my supervisor, I want to make sure I’m not missing something.
Question 14K(1) of the Form U4 asks, among other things, whether, in the past 10 years, you made a “compromise with creditors.” A compromise with one or more creditors generally involves an agreement between a borrower and a creditor in which a creditor agrees to accept less than the full amount of the debt owed as a complete satisfaction of the outstanding debt. A bank, or other lender, that gave you a mortgage (or which holds your mortgage) is a creditor. In general, for purposes of this question, an agreement between a borrower and a creditor that only changes the terms of the repayment and that doesn’t decrease the full amount owed does not constitute a compromise with a creditor. Generally, in a short sale, a lender/creditor “compromises” by agreeing to allow the sale of the real estate although it will receive from the borrower an amount less than the full amount owed so a short sale would typically be considered a “compromise with creditors.” However, it should be noted that in some cases the nature of the short sale agreement and/or relevant state laws may enable a lender or, some other third party, to seek a judgment for the unpaid amount owed after the auction or sale of the real estate if the sale is consummated for less than the balance due on the loan. If that’s the case in your state, the short sale may not technically be considered a “compromise,” and would not, therefore be reportable as such. It would only be considered a “compromise” if the lender or creditor forgives the outstanding amount owed. Note that, if the lender obtained a judgment that remains outstanding, it might have to be reported in Question 14M as an “unsatisfied judgment.”
