Securities Industry Employment Dispute Attorneys │ Bakhtiari & Harrison
Bakhtiari & Harrison represents registered representatives, RIAs, investment bankers, and other financial industry professionals in employment disputes against broker-dealers and financial institutions — including wrongful termination, discrimination, harassment, constructive termination, retaliation, and hostile work environment claims. Employment disputes in the securities industry are typically resolved through FINRA arbitration under the industry code, which has its own procedures and strategic considerations distinct from court litigation. Partner David Harrison is a former New York City assistant district attorney and ex-Morgan Stanley in-house counsel who understands how firms approach these disputes from both sides. Free consultation. Cases handled on flat fee or contingency basis depending on the matter.
Employment disputes in the securities industry — what makes them different
Employment disputes involving registered representatives and financial professionals are not the same as ordinary employment disputes. They are subject to a different legal framework, a different arbitration forum, and different strategic considerations:
- Most employment agreements in the securities industry contain FINRA arbitration clauses requiring disputes to be resolved before a FINRA panel under the industry code (FINRA Rule 13000 series) rather than in court
- The U5 form — filed by the firm when a professional departs — creates a permanent public record of the termination reason that can itself become a source of harm and a separate legal claim
- Compensation disputes, promissory notes, and employment claims are often intertwined and are frequently filed as a single combined FINRA arbitration case
- Retaliation claims arising from whistleblowing or compliance complaints may have both FINRA arbitration and federal court remedies
- California financial professionals have additional state law protections under the California Labor Code and the California Fair Employment and Housing Act that may supplement FINRA remedies
Common employment disputes handled by Bakhtiari & Harrison
Wrongful termination
A broker-dealer or financial institution that terminates a registered professional without cause, in violation of the employment agreement, or as a pretext for another improper reason may be liable for wrongful termination. Wrongful termination claims in the securities industry are typically brought in FINRA arbitration alongside related claims for unpaid compensation and U5 defamation.
Constructive termination
Constructive termination occurs when a firm makes a professional’s working conditions so intolerable that a reasonable person would feel compelled to resign. Common examples include stripping an advisor of their best accounts without justification, drastically and unilaterally reducing compensation, demoting without cause, or subjecting the professional to a hostile work environment. Constructive termination is treated as involuntary for purposes of compensation entitlements and promissory note defenses.
Discrimination and harassment
Financial professionals who have been subjected to discrimination based on race, gender, age, religion, national origin, or disability, or who have been subjected to sexual harassment, have claims under federal and California state law. California law provides particularly robust protections and remedies for workplace discrimination and harassment.
Retaliation for compliance complaints
A registered professional who is terminated, demoted, or subjected to adverse treatment after raising a compliance concern, reporting a violation to FINRA or the SEC, or refusing to participate in improper conduct may have a retaliation claim. Federal whistleblower protections under the Dodd-Frank Act provide significant remedies for retaliation in the securities industry context.
Hostile work environment
A pervasive pattern of discriminatory or harassing conduct that makes the workplace environment objectively hostile may give rise to a hostile work environment claim even if no single incident would constitute actionable harassment on its own.
Frequently asked questions
Is FINRA arbitration the right forum for my wrongful termination claim?
For most registered representatives and financial professionals, yes — the employment agreement almost certainly requires FINRA arbitration under the industry code for employment disputes with the firm. FINRA arbitration under the industry code (Rule 13000 series) is a different proceeding from the customer arbitration code, and has its own discovery rules and procedures. Certain claims — particularly federal discrimination and whistleblower claims — may also have remedies in federal court that can be pursued alongside or instead of FINRA arbitration.
My firm says my termination was “for cause” — does that mean I have no claim?
Not necessarily. A firm’s characterization of a termination as “for cause” is not the final word. FINRA arbitrators evaluate the actual facts independently of how the firm has labeled the termination. If the stated reason for termination does not hold up to scrutiny — if it was pretextual, applied selectively, or was used to justify withholding compensation — you may have viable claims regardless of what the U5 says. Bakhtiari & Harrison can review your situation and advise on whether the facts support a claim.
Most employment disputes in the securities industry are arbitrated before the Financial Industry Regulatory Authority. FINRA arbitration is a dispute resolution process used to resolve conflicts between investors and securities firms. Administered by the Financial Industry Regulatory Authority (FINRA), this process offers a faster, less formal alternative to court litigation. It involves a neutral panel of arbitrators who review evidence and make binding decisions. Bakhtiari & Harrison has extensive experience resolving employment disputes in this forum around the country.
Contact Bakhtiari & Harrison for a free initial consultation.
Employment dispute cases are handled on a contingency fee basis — no recovery, no fee.
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