Form U5 Defamation Claims On The Rise At FINRA: Be Prepared!

Under Financial Industry Regulatory Authority's (FINRA) rules, whenever broker-dealers, registered investment advisers, or issuers of securities (FINRA member) terminate the employment of a FINRA-registered representative, including a licensed broker or financial advisor (an associated person) the member firm must file a Form U5 (the Uniform Termination Notice for Securities Industry Registration). The standard Form U5 must also be filed for current employees if the firm decides to terminate their registration with FINRA, even if the firm continues the employee's employment in a non-registered capacity. The Form U5 must be filed within thirty days of the date of the termination event, and it requires a firm to provide accurate answers to various questions, including the reason for an associated person's termination of their registration.