Q: More than two years ago, after I left my last job, I had a client file an arbitration action against me and my former employer. The case recently settled. My current employer had already listed this action on my U4, but my former firm just filed an amended U5 disclosing the incident. So now it looks like I have two matters on my record when it’s really just one. Did my former firm have the right to file an amended U5 after all this time?
A: Under Article V, Section 3 of the FINRA bylaws, firms are required to file an amended Form U5 when they learn of facts or circumstances that make a previously filed Form U5 inaccurate or incomplete.
This amended U5 is required to be filed within 30 days of learning of the event that causes the original U5 to be inaccurate. When the U5 is amended for the first time and FINRA sees that the arbitration was filed some time ago, someone at FINRA is likely to refer it over to enforcement for review.
If, as I understand it, the original U5 contained no mention of the arbitration action, your former employer was significantly late in filing the amended U5 and could very well be fined.
As for the fact that your record looks like it contains two separate matters, it’s a little difficult for me to comment without seeing how they appear on your CRD report. Given your worries, I would suggest that as a starting point you contact the FINRA Gateway Call Center to see whether the incident is properly listed. If not, the Call Center would be able to explain the procedure for correcting any error.
Regulators have revealed what kind of issues advisors must address if faced with a review.
