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Securities Industry

Employment in the securities industry as a broker-dealer is regulated by the Financial Industry Regulatory Authority (FINRA) and presents unique issues in employment law for securities lawyers. If you become a broker-dealer employee of a brokerage, your employer will be required to register you with FINRA by filing a Uniform Application for Securities Industry Registration or Transfer (Form U-4) when you are hired that includes your agreement to arbitrate any claim between you and your employer that FINRA rules require be arbitrated. You will also enter into an employment contract with your employer that will most likely include restrictive covenants (non-compete, non-solicitation and non-disclosure) and a further clause requiring you to arbitrate all disputes between you and your employer before FINRA, rather than in court.

Broker-dealer employees work on a commission basis, and employers often offer a variety of incentives for you to become an employee, sometimes including an advance on commission in the form of a promissory note (also called an "up-front forgivable loan," or UFL) that is forgiven over the time of your employment.  When you leave a brokerage job, your employer will file a Uniform Termination Notice for Securities Industry Registration (Form U-5) with FINRA, which will include a reason for your termination that will stay on file your entire career.

What employment law issues am I most likely to face as a broker?

I think I have an employment law problem unique to my work in the securities industry. What can securities lawyers do to help me?

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