What happens at the end of a lost prom note arbitration - if you don't pay

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Bridgedec's picture
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Joined: 2010-09-09

Hoping for any experiences here:I've got your typical promissory note argument with my prior firm UBS.They say I owe X, I say I owe X.  My basic argument is that they are not crediting me with time served for the 6 months I worked after my anniversary in the last year of my deal.  (I had a five year deal, left after 4 years 6 months and was shocking when the demand letter did not amortize the 1/2 year's worth of time served).  What makes this so repulsive to me is that the only reason I quit was because they put my commission grid in the penalty box despite assurances (verbal and in email, which I've retained) that this would not happen during the 5 years surrounding my obligations with the promissory note.  In other words, my length of experience would be adjusted to reflect the time I had been a broker, not since the time of my original series 7 license date.The Prom note does say I have to be an employee "in good standing" on my anniversary date to obtain the forgiveness, but they also state that the loan can be paid back at any time at the daily pro-rated amount.Anyway, I offered then the amount they say is due, minus the 6 months of service I obtained in my final year.. This obviously cut the amount they claim I owe in half.  They said (through their collection firm/outside counsel) no deal.If this goes all the way to arbitration, and I loose (there claim is 100% awarded), I will not be able to pay, and I am not willing to go on a payment plan because my business cannot support it and, frankly, my spirit is shot.   I think I'd just try to start a new career.So, my question is:  If I loose the arbitration and they are awarded the full amount... what happens legally to me if I don't pay?  Filing bankruptcy is not an option... I'm wondering if they can come after me civilly or does it just stop with FINRA after they bar me and suspend my licenses.  Obviously, I couldn't work in the financial services industry, but that seems OK to me after all this tumult.Thanks for sharing any knowledge or advice.BD       

Bridgedec's picture
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Joined: 2010-09-09

rrbdlawyer any chance you could share some insight?Anyone?Thanks, BD  

x-morganguy's picture
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Joined: 2010-04-09

Keep in mind that FINRA arbitration will almost always favor the Firms, it's just the way it is.  If you get hit with a FINRA award you will have 30 days to pay up.  If you don't, FINRA Enforcement will move to revoke your securities license.  DON'T LET THESE DIRT BAGS WIN !  If you have a Bonafide resason that you can't pay like you don't have the cash then FINRA will give you an exemption.  You will need to prove to them that you don't have the cash.  Maake sure that your income equals your expenses and don't go out to buy anything expensive to work down the cashflow.  If you receive the exemption (which is easy; I got one) then the Firm will decide whether or not to prusue a judgement through civil court.  If they get it they get it...no big deal.  I say F-EM and their attorneys with the big nose and large lower lip.......know the group I refer to !

Cowboy93's picture
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Joined: 2005-05-10

x-morganguy wrote:If you have a Bonafide resason that you can't pay like you don't have the cash then FINRA will give you an exemption.  You will need to prove to them that you don't have the cash.  Incorrect.  This option was done away with a few months ago.

Bridgedec's picture
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Joined: 2010-09-09

Thanks for the help guys.XMorgan, when you say "The Firm will decide whether or not to prusue a judgement through civil court.  If they get it they get it...no big deal"So what happens if they do get it?  It is my understanding now that they can arrest you or seize property....All along I thought I could just loose my securities license if I didn't have the money to pay the award... 

Popeye $'s picture
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Joined: 2009-06-30

Bridgedec wrote:Thanks for the help guys.XMorgan, when you say "The Firm will decide whether or not to prusue a judgement through civil court.  If they get it they get it...no big deal"So what happens if they do get it?  It is my understanding now that they can arrest you or seize property....All along I thought I could just loose my securities license if I didn't have the money to pay the award... Any updates on this Breidgedec?

SECLaw's picture
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Joined: 2009-08-02

Cowboy93 wrote:x-morganguy wrote:If you have a Bonafide resason that you can't pay like you don't have the cash then FINRA will give you an exemption.  You will need to prove to them that you don't have the cash.  Incorrect.  This option was done away with a few months ago.The "bona fide inability to pay" defense to the suspension proceeding was removed for customer awards. It still exists for awards in favor of firms against brokers. It is NOT simple, it is NOT easy to obtain, but it can be done.

stockattorney's picture
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Joined: 2010-09-09

So aside from FINRA barring you should you not pay, the BD has an award and will have the choice to go to court an certify the award and obtain a judgment.  With the judgment they can proceed with collections, which involve a whole different area -- all of this being OUTSIDE of the FINRA process.  Now, the BD will have to make a business decision whether or not to incur the added expense to pursue you with a judgment should you not be collectable.

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