What Happens when a Rep Files for Bankruptcy?

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youngun82's picture
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Joined: 2008-02-19

If  a Rep Files for Bankruptcy can he be fired? Does anyone have any knowledge on this subject?

doberman's picture
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Joined: 2005-02-22

Depends on the firm. A broker with a bankruptcy filing could be a liability to a firm, if that broker gets hauled into arbitration.

youngun82's picture
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Joined: 2008-02-19

So assume the Rep has a sterling record to this point. When he files and then updates his U4. Will anything happen? Can anything Happen?

troll's picture
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Joined: 2004-11-29

You may be placed under "heightened supervision" by your firm. 
 
Some firms may not allow you to stay.
 
It may depend on the circumstances that caused you to be in debt and how it escalated to cause a BK.  (Keep in mind that this won't matter if it's chapter 7 or 13, so see which will make the most sense for you.)
 
Be aware that some clients know how to look up their broker's record online and see this information.  That's in addition to CPA's and Attorneys.  (I'm sure you already know this.)
 
You will want to talk to a securities lawyer and a BK lawyer.

Captain's picture
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Joined: 2006-04-07

I had an assistant (registered) that filed BK after incurring a large amount of legal bills for an issue unrelated to her employment.  Now, if you look at her record on FINRA, you will find a disclosure event named 'financial', and you will be able to read a few lines of information relating to this event.  So, it is reported, and the information is publicly available.
I wouldn't imagine any other rep would be different.  As for losing your job, if you can't manage your own money, why would they want to keep you on board to manage the finances of others.  I'm with other people that say you can't be terminated for BK reasons solely, however, you'll be placed on heightened scruitiny, and I would see the additional liability and difficulty in getting bonded as reasons that they might ask you to leave.
 
C

Dark Knight's picture
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Joined: 2008-01-30

A rep in my old EDJ region filed a few years back.  He's still around. 

youngun82's picture
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Joined: 2008-02-19

Thanks for the feedback everyone!
let me put this out there maybe this will help. The firm the employee works for is an idependent firm. The Firm backs the employee and is willing to keep him on board, I guess the question is when the firm goes to the Broker Dealer what can they do? From what it sounds like, Firing the employee for the sole purpose of this bankruptcy is not one of their options.
 
 

Roadhard's picture
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Joined: 2007-02-23

Firms do look at the nature of the BK--if your child just racked up 2 million in medical bills and your insurance max was 1 million--most firms and insurance companies will live with this--if you were forced into BK due to divorce -- they will live with it---but if you can't control your spending ect..., you could be fair game to be fired--that's why most firms call you an at-will employee--Indy's included.

ivebeentaken's picture
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Joined: 2008-05-06

A rep can be fired for anything anytime.  I was railroaded and fired so that the male in my office could have my $100,000 book of business.  My branch manager set me up and fired me when I did what he told me to do.  But another rep in the office did the same thing and there was no retaliation.

Philo Kvetch's picture
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Joined: 2005-05-17

ivebeentaken wrote:A rep can be fired for anything anytime.  I was railroaded and fired so that the male in my office could have my $100,000 book of business.  My branch manager set me up and fired me when I did what he told me to do.  But another rep in the office did the same thing and there was no retaliation.
 
I'm sorry, but that doesn't pass the sniff test. 
 
Why on earth would a branch manager want rid of a producer who built a $100 million dollar book, not to mention invite a sexual discrimination lawsuit?

ivebeentaken's picture
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Joined: 2008-05-06

Because I didn't build the book, I bought it and because I'm a woman & the other FA was a man who had been there 15 years longer than I.  He also had time to kiss up to the Branch Manager who lied when asked what was said about the sexual accusations.  The others in the office also lied to keep their jobs. $100,000 is a great incentive for theivs and liars.

Axle's picture
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Joined: 2008-04-08

If you have any great fishing stories 'ivebeentaken,' I'd love to hear them...

BrianAdam45's picture
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Joined: 2010-09-23

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I think it will depend on the law firm. Some might fired him
because of his liability. But this process could not be done immediately. This
might also him first into lifestyle check or supervision. Talking into a
bankruptcy attorney is the best one to be done. They can provide more
information about this case.

 

BigFirepower's picture
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Joined: 2010-07-09

Axle wrote:If you have any great fishing stories 'ivebeentaken,' I'd love to hear them... Essentially you are calling her out as a liar. I see nothing she's written to prove that. Certainly there is "another side to the story" but your response isn't particularly "the right thing to do". I've been in this biz long enough to see her kind of story played out over and over again...

jackofalltrades's picture
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Joined: 2009-05-20

As far as a lien is concerned... Is a lien on a property considered a reportable event...? For example a mechanics lien or HOA lien. While generally they are tied to the associated property and not the individual. Just curious.  

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