Broker Defense - Securities

Jones Bell has developed a reputation for zealous representation of broker/dealers and representatives in the securities industry. Jones Bell provides representation in regulatory matters before the SEC, NASD, and NYSE, including regulatory investigations and enforcement actions. We also regularly defend broker/dealers and representatives in retail customer disputes, promissory note cases, recruitment matters, unfair competition disputes and employment litigation. Jones Bell can also assist you in maintaining and expanding the value of your business with appropriate compensation programs, trade secret protections, and other operational matters.

Regulatory Investigations

A regulatory investigation can be a precursor to a closed file or to an enforcement action. An accurate, well constructed response to the regulator involved can mean the difference between success and failure. We can assist you in:

Identifying the concerns of the regulator that caused the investigation
Evaluating the documentation that is produced to the regulator
Drafting an accurate, written explanation of the events giving rise to the investigation
Responding orally to the regulator should an interview be required
Encouraging the regulator to close his or her file without taking action

Enforcement Actions

Enforcement actions can be career ending events. A life-time bar from the securities industry would end a broker's livelihood. Lesser sanctions, such as a non-public Letter of Admonition, or fine and short suspension, are possible. We have successfully obtained hearing panel determinations that the regulator has not met its burden of proof. We can assist you in:

Responding to the regulator's complaint
Preparing a "Wells" submission
Attempting to achieve an early resolution
Determining mitigating factors for imposition of lesser sanctions
Arguing for mitigating factors and against aggravating factors
Negotiating available sanctions, such as a shorter suspension or lower fine
Defending against the regulator's complaint through the regulator's hearing process
Determining the nature and scope of any possible cooperation with the regulator

Retail Customer Disputes

Disgruntled customers now bring claims whenever they lose money on an investment, encouraged by "sue your broker" advertisements and websites. For over 35 years, we have been defending against these claims, which regularly involve allegations of:

Unsuitable Transactions
Churning
Misrepresentations
Fraud
Negligence
Breach of Fiduciary Duty
Violations of Federal and State Securities Laws
Violations of NASD or NYSE Rules
Elder Abuse
Breach of Contract

Promissory Note Cases

When representatives leave their firms for new firms, they often leave unpaid promissory notes they signed under "forgivable loan" and other transition incentive programs. We represent parties in litigation of these intra-industry disputes, which often involve claims by the representative that there were misrepresentations by the departed firm about:

The type of business the representative could do at the departed firm
The back office support that would be provided to the representative
The approval process for new products
The approval process for individual RIAs
The approval process for advertising

Recruitment Matters

When representatives leave their firms for new firms, the prior firm often files litigation to prevent the representative from soliciting the customers serviced at the prior firm. Whether the Temporary Restraining Order (TRO) is granted or denied is usually the determining factor in whether the representative's book of business stays with the prior firm or transitions to the new firm. We have represented all sides in these intra-industry disputes for over 35 years. We can advise you how to:

Avoid being sued by your prior firm when you leave
Draft a letter to your clients without running afoul of legal restrictions on solicitation
Defeat your prior firm's request for injunctive relief
Negotiate a reasonable resolution if a TRO is granted
Avoid allegations of identity theft by customers involved in the tug-of-war over the customer's financial records

Employment Litigation

We have prosecuted and defended a wide range of employment claims in the securities industry. The matters we can assist with include:

Defamation claims by a representative about the language in the U-5 submitted to the NASD by the prior firm.
Wrongful termination and constructive termination claims by a representative or other employee
Discrimination claims by a representative or other employee
Harassment claims by a representative or other employee