We defend brokers in promissory note arbitrations before FINRA in the 10005 zip code and beyond.
On Wall Street, and elsewhere in the Financial District of Manhattan, New York City, brokerage firms regularly demand that brokers who are leaving the firms repay monies owed under promissory notes. The repayment obligations under promissory notes can financially cripple brokers departing from their brokerage firms. This is the case because the up-front bonus or employee forgivable loan provision of a broker’s employment agreement usually provides that if the firm fires the broker within a specified period for any reason, or if the broker elects to leave the firm, the remaining monies outstanding on the loan immediately become due to the firm.
At the Law Offices of David S. Rich, we adroitly negotiate, on brokers’ behalf, with brokerage firms which seek to recover under promissory notes. Moreover, if a forgivable loan dispute cannot be resolved, we vigorously defend the brokers in promissory note arbitrations before the Financial Industry Regulatory Authority, Inc. ("FINRA"). At the Law Offices of David S. Rich, our New York City Promissory Note Arbitration Attorney has extensive experience in defending brokers in promissory note arbitrations before FINRA on Wall Street and beyond.
From negotiating settlements with brokerage firms to prosecuting counterclaims against employers to defending brokers in arbitration hearings before FINRA arbitrators and arbitration panels, our skillful New York City Promissory Note Arbitration Lawyer works tirelessly to achieve the best possible results for brokers in promissory note disputes on Wall Street and elsewhere.
A category of disputes frequently arbitrated before FINRA between brokerage firms and brokers involves transitional compensation payments to brokers whose employment the firms have terminated within a predetermined period of time. These disputes are termed promissory note, recruiting bonus, up-front bonus, forgivable loan, or employee forgivable loan ("EFL") cases.
It is very challenging, but it is in no way impossible, for a broker who has been damaged by his or her brokerage firm to defeat, or at least to win counterclaims offsetting in whole or in part, a brokerage firm’s claim to collect, from the broker, monies owing under a promissory note.
In the financial services industry, brokerage firms regularly offer account executives transitional compensation to facilitate the account executives’ lateral changes of employment to those firms. A firm intends for such compensation both to lure the account executive into joining the firm and bringing with him his book of business, and to ensure that the executive won’t enjoy a windfall if he leaves the new firm soon after arriving.
Consequently, the recruiting bonus or forgivable loan provision of a broker’s employment agreement usually provides that if the firm fires the broker within a specified period for any reason, or if the broker elects to exit the firm, the remaining monies owing on the loan immediately become due and payable to the firm.
The recruiting bonus provision of a broker’s employment contract typically provides that the brokerage firm will forgive the loan in equal annual installments during a specified period. That period is usually in the range of five years to seven years.
The repayment obligation contained in a broker’s employment agreement is guaranteed by a promissory note.
Typically, the amount of the employee forgivable loan equals 100% or more of the broker’s trailing 12 months of gross commissions.
Should the discharged broker not immediately repay the loan, the brokerage firm may choose to bring a FINRA arbitration against the broker to recover the monies owing.
At the Law Offices of David S. Rich, our New York City Promissory Note Arbitration Attorney has extensive experience defending brokers in promissory note arbitrations before FINRA on Wall Street and beyond.
Call Now For An Initial Consultation New York (347) 418-0672 | New Jersey (201) 884-2114
For years, brokerage firms’ lawyers have written, changed, and fortified the promissory notes securing the repayment obligations contained in brokers’ employment agreements such that the notes are very difficult to invalidate.
Therefore, in promissory note cases, a good offense is the best defense. In other words, the broker may have a strong counterclaim which can offset all or a part of any arbitration award to the brokerage firm.
In promissory note arbitrations, a number of the counterclaims that may offset, in whole or in part, any monetary award to the brokerage firm are as follows. At the Law Offices of David S. Rich, we have far-reaching experience prosecuting, on behalf of brokers, these counterclaims and various other counterclaims.
Fraudulent Inducement of Employment. When a brokerage firm makes to a broker, at the beginning of the employment relationship between them, verbal representations which the firm, at the time it makes the promises, knows that it has no intention to keep, that broker may well have a winning claim against the firm for fraudulently persuading him or her to accept employment with the firm. Examples include promises about authorization to sell certain financial products at favorable prices, compensation packages and incentive compensation, support staff, travel and expense budgets, and introductions to high net worth clients.
It may well be the case that, because the brokerage firm breached these verbal promises, the broker
was not able to originate enough clients at the firm, to keep an adequate number of customers upon joining the firm, or to talk his clients at the firm into engaging in sufficient fee-generating transactions.
In situations like these, the broker may well have a meritorious claim against the brokerage firm for fraudulently persuading him to join the firm.
Unpaid Overtime Compensation. Many brokers in New York work well in excess of 40 hours per workweek. If a broker at a brokerage firm in New York City works over 40 hours per workweek, but he or she is not paid, each workweek irrespective of the quantity or quality of his or her work, at a minimum salary level of at least $1,125 per week ($58,500 per year), the broker may have a (counter)claim against his or her brokerage firm for unpaid overtime pay.
Defamation. In New Jersey, and in some other states, a broker or other registered representative may successfully sue a brokerage firm or other ex-employer in the securities industry for defaming
the broker or other registered representative on a Form U-5 (Uniform Termination Notice for Securities Industry Registration). The broker or other registered representative must prove the usual elements of defamation, as well as that the ex-employer acted with malice.
Unpaid Salary, Unpaid Bonuses, Unpaid Commissions, or Unpaid, Deferred Compensation. Additional counterclaims that may offset, in whole or in part, any monetary award to the brokerage firm in a promissory note arbitration include, among others, unpaid salary claims, unpaid bonus claims, unpaid commissions claims, and unpaid, deferred compensation claims.
Call the Law Offices of David S. Rich to confer with a skilled New York City Promissory Note Arbitration Lawyer about your promissory note case.
You can avoid having your former brokerage firm bring an action to collect on your promissory note by paying back your promissory note when it becomes due. Promissory notes invariably become due at the time that you leave the firm, whether voluntarily or involuntarily.
The best way to make sure that, if and when you leave the brokerage firm, you pay back your promissory note is to treat that forgivable loan as what it is -- a loan, not wages.
In other words, when you join the firm and you receive the proceeds of a loan, put it in a savings account, don't touch it, and allow it to continue to accrue interest. Do not spend the loan proceeds except to the extent that they are periodically forgiven.
The regrettable reality is that such saving, by the broker, of the proceeds of a forgivable loan appears to happen only rarely.
Much more often, the broker spends the proceeds of the forgivable loan upon receiving those proceeds –- that is, when the broker begins working for the brokerage firm. When the time comes to repay, the broker doesn't have the funds to fulfill his or her obligations under the promissory note. The firm then files with FINRA, and in most cases wins, an arbitration to enforce the broker's obligation under the promissory note.
That said, and as discussed above, it is not easy, but it is in no way impossible, for a broker who has been damaged by his or her brokerage firm to defeat, or at minimum to prevail on counterclaims offsetting in whole or in part, a brokerage firm’s claim to recover, from the broker, monies due and owing on a promissory note.
Call the Law Offices of David S. Rich at New York (347) 418-0672 | New Jersey (201) 884-2114 for expert legal assistance in seeking to defeat, or to offset in whole or in part, your brokerage firm’s promissory note claim against you.
If you are a broker who has been fired by, or who has voluntarily quit your employment with, your brokerage firm before the firm forgave, in its entirety your promissory note, contact the Law Offices of David S. Rich.
Again, if you are a broker whose former brokerage firm has issued, to you, a letter demanding that you repay monies owed under your promissory note, call New York City Promissory Note Arbitration Attorney David S. Rich at New York (347) 418-0672 | New Jersey (201) 884-2114.
So, too, if you are a broker whose former brokerage firm has brought a promissory note arbitration against you seeking to collect monies payable under your promissory note, call New York City Promissory Note Lawyer David S. Rich at New York (347) 418-0672 | New Jersey (201) 884-2114. We work zealously to attain the best possible outcomes for brokers in promissory note disputes on Wall Street and beyond.
Call Now For An Initial Consultation New York (347) 418-0672 | New Jersey (201) 884-2114
Don’t attempt to defend, without an experienced New York City Promissory Note Arbitration Attorney, your brokerage firm’s promissory note arbitration against you. Brokers who, without a lawyer, defend promissory note arbitrations virtually never succeed. Instead, if are a broker who lives or works in zip code 10005 or beyond and your brokerage firm has demanded that you repay monies owed under a promissory note, call the Law Offices of David S. Rich today to get the expertise and attention that you not only need, but deserve.
If you are seeking a Wall Street, New York City Promissory Note Arbitration Law Firm in zip code 10005 or beyond who will fiercely advocate for you, look no further than the Law Offices of David S. Rich. With more than 25 years of legal experience, Mr. Rich will adroitly negotiate, on your behalf, with your brokerage firm which seeks to collect on your promissory note. In addition, if your employee forgivable loan dispute cannot be resolved, Mr. Rich will vigorously defend you in your promissory note arbitration before FINRA.
Call New York (347) 418-0672 | New Jersey (201) 884-2114 or click here to get in touch with New York City Promissory Note Arbitration Attorney David S. Rich about securing your legal and financial future.
420 Lexington Avenue, Suite 300
New York, NY 10170
Phone: (347) 941-0760
Text Us: (347) 389-7755
Fax:
12 First Street
Englewood Cliffs, NJ 07632
Phone: (201) 740-2828
Text Us: (347) 389-7755
Fax:
Call Now For An Initial Consultation New York (347) 418-0672 | New Jersey (201) 884-2114