Form U-5 Expungements

When a broker’s employment is terminated, brokerage firms must complete and file a Form U-5 (Uniform Termination Notice for Securities Industry Registration) with securities regulators. They are required to report the reason for the termination, and whether the broker left voluntarily, was allowed to resign, or was fired. If a brokerage firm wants to retaliate against a broker formerly in its employ, it may include information on the Form U-5 that ruins the broker’s reputation and damages their ability to find another job in the securities industry. Arbitration before a FINRA panel is the only recourse available to brokers who want injurious comments removed from their Form U-5. FINRA will expunge details if the panel members find them to be “defamatory, misleading, inaccurate, or erroneous.” The arbitration award must specifically require expungement; and supply the language to be substituted for the deleted statements.