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Brokerage Firms Continue to Win Cases Against Their Former Brokers

Brokerage Firms Continue to Win Cases Against Their Former Brokers

Brokerage Firms Continue to Win Cases Against Their Former Brokers 150 150 Rex Securities Law

For many years brokerage firms have customarily paid a bonus to a broker moving from one firm to another. A broker moving from firm A to firm B is generally compensated based upon the amount of the commissions and other credits he has earned during the prior 12-18 months at the firm he is leaving. The bonus is initially granted in the form of a loan that is forgiven based upon the number of clients the broker can convince to follow him from firm A to firm B and the amount of commissions he earns.

If agreed upon goals are met (in other words if the broker generates a set amount of commissions and fees from the customers)  the loan is forgiven over a specified number of years. If the broker leaves, is fired or quits the industry and the loan has not been entirely forgiven, the broker is required to repay the outstanding balance. If the broker does not repay, the firms generally sue the broker for the outstanding balance. It is typical for the broker to make some type of counterclaim against the firm claiming poor working conditions, etc.

Recently there were several of these types of cases tried to conclusion:

  • UBS v James Martin Meis-Case # 11-3898- UBS sought $1.2 million plus interest, attorney fees and costs. Meis requested dismissal of the case and damages in excess of $250,000, punitive damages and other relief. The FINRA panel awarded total damages of $1.4 million.
  • Morgan Stanley v Julie Lynn Sheppard– Case #12-1767- Morgan Stanley sought repayment of $232,409 on a promissory note plus interest and fees. The panel awarded the requested amount plus interest.
  • LPL Financial v Brenda R. Aslyn– Case #12-3529- LPL Financial sued Aslyn on a note seeking $35,000 plus interest and other relief all of which was awarded in favor of LPL.

If you have questions or complaints about losses in your brokerage account, call us for a no charge consultation.

Rex Securities Law , located in Boca Raton, FL, provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Rex Securities Law

561 391 1900

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