Financial Professional Employment Law and Regulation

Registered representatives and investment adviser representatives have unique relationships with the broker-dealer and investment advisory firms sponsoring them—whether as employers or via an independent contractor arrangement. The investment management industry is a highly regulated one in many ways, not least of which being the complex rules that dictate much of the terms of the relationship between representatives and their firms. These terms obviously include matters of compensation and benefits, but also bear on supervision, discipline and restraints on future competition and solicitation. Parker MacIntyre regularly represents both firms and individuals with respect to their employment contracts, including extensive drafting and negotiation on the front end of the relationship. We also handle disputes that arise on the back end of that employment relationship, for example, when it is strained, is coming to an end or has been terminated. At times, this may include representing a firm or a representative in a dispute in court or an arbitration forum.

While Parker MacIntyre naturally provides employment-related legal services to its many investment advisory and broker-dealer firm clients, we are also often called upon to represent individual representatives in connection with their joining an investment firm or, alternatively, their separation from that firm. Indeed, representatives joining a firm, moving from one firm to another and those representatives involved in employment-related disputes with their firms should all seriously consider retaining legal counsel to represent them in such matters. While representatives entering into an independent contractor arrangement often realize this more readily, this fact holds true equally with respect to employee-employer negotiations. Transitioning from one firm to another may involve analyzing non-compete and non-solicit agreements, obligations to the prior firm and the so-called Protocol for Broker Recruiting. Some transitions require an analysis of state laws that prohibit raiding of a competitor’s personnel.

In such an environment, Parker MacIntyre is a competent and trusted partner for you, whether you are a firm or a representative. Our attorneys are highly-skilled in matters involving the complex firm-representative relationship, as we—unlike the general practice employment attorney—work entirely within the confines of investment advisory and brokerage industry law. Indeed, where drafting/negotiating an employment contract requires a detailed knowledge of industry laws, rules, standards and practices, the typical general practice employment attorney may face a harsh learning curve. Parker MacIntyre, on the other hand, is perfectly at home in this environment.

In connection with our representation of both firms and representatives, Parker MacIntyre is called upon to draft an assortment of technical employment-related legal documents. These include registered representative and advisory representative compensation agreements, severance agreements, stock option agreements, executive compensation agreements, solicitation agreements, consulting agreements, confidentiality agreements and non-compete/non-solicit agreements.

Frequently, a representative will find that a derogatory or false disclosure has been made on his or her public disclosure page on FINRA’s online Broker Check portal. Typically, this comes about as a result of a prior firm making an entry about a departing representative on that person’s Form U-5 (the standard form used in the brokerage industry for representative separation/termination from a firm). In such situations where the derogatory or false disclosure is of a magnitude that it may significantly impair the representative’s future business or employment opportunities, there are potential legal steps which may be taken to “expunge” the disclosure. Parker MacIntyre routinely handles these types of expungement proceedings, which are governed by the FINRA rules as well as the common law.