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Nov 11, 2010 9:21 pm

I am looking for some advice from someone who has been through this type of situation before, or someone who has some specialized knowledge in this area.  Three and a half years ago I joined a well known investment firm whose homebase is in the midwest-specifically St. Louis(not EDJ).  Over the past three and a half years they were bought out by a large bank based in Charlotte North Carolina, then that bank was bought out by another major bank based out of San Francisco.  I joined the St. Louis firm for very specific reasons and did not entertain employment by the other two-until I was forced into employment due to acquisition.  Along with these acquisitions came many changes including a major reduction in payouts, which eventually forced me to leave the company and seek employment with another firm-an independent firm.  I came to the firm out of St. Louis already registered and trained, but was placed in their training program anyway.  Now I am being told I owe the firm from San Francisco nearly 28k for supposedly breaking a contract that I had when I joined the company from St. Louis.  I am not sure what to do, but do not feel that I owe this money due to the fact that so many variables within the employment structure changed due to forces outside of my control.  I took no money for retention bonuses or anything else.  The only thing that I took was a smaller paycheck and the realization that to keep food on the table for my family I needed to go somewhere else.  Please let me know what if anything I can do in this situation.

Thank you.

Nov 11, 2010 9:42 pm

Call a lawyer

Nov 11, 2010 9:48 pm

I agree.  That's well beyond the scope our knowledge here.  While it sounds like I agree with you, what I think and what you think really doesn't matter.  It's going to come down to what can their lawyer prove to your lawyer or to a court.  Better to spend a few bucks on a lawyer to help than to know you're going to spend $28K if you don't hire one. 

Good luck.   

Nov 11, 2010 10:44 pm

Hey folks, I don't mind Bill Singer coming here and giving his two cents and all, but trust me, sharing thoughts is what this place is supposed to be about. Spaceman, if it wasn't for folks with your attitude, I might have avoided some BS, so I'm going to say something to potential help another guy out.

Here are some facts, details, and it aint got nuttin to do with me playing attorney.

What does your CONTRACT have to say. Was your contract assignable or not?

Anyone can take any associated member of finra to arbitration, regardless of merit. This is VERY important, think about it... Just like other lawsuits, it's about money/power/ability to drag you into court and make YOU spend money.

It is cheaper to avoid a fight, then some prolonged battle.

Even if you defend yourself, going to arbitration is expensive, filing fees/room costs/arb costs, yada yada...

Being that you're indy, your deemed to be an easy target.

If you were to win in arbitration, you'd be a MASSIVE liability to the firm going against you. Are they willing to risk that, for a pint sized amount??

Nov 12, 2010 12:12 am

I prefer to avoid lawyers like the plague. And I don't know much about this stuff. Big makes some good points and I learned something.

So, why don't you just continue to be a reasonable guy and cut and paste some of the stuff you wrote above, and start documenting in letters to them your position?

This is a relatively small amount of money at risk. Have you received notice of potential legal action, where they would be charging you their legal fees if you "lost"?

As you say, you are just a victim. Don't put a lot of emotional energy or money into this, don't give it any power.

As Big says, go with what the contract says. How did they come up with $28, 000. Why not be a nice guy and offer them $750 to cover the cost of tracking things so far, does that put you in a weaker position if things turn nasty?

On that other topic, aren't we just a bunch of avatars BSing? I don't think we should be giving retail investment or insurance advice, but if you don't know when to hire a lawyer or not, maybe you should be picking fruit ( a noble occupation, I know from experience).

From a Buddhist perspective, the causality which is Bill Singer - even this is not real.

Nov 12, 2010 12:09 am

(edit duplicate).

Nov 12, 2010 4:56 am

Thank you for your advice Big and Times7.  Big, I am not sure if the contract is assignable(not sure what that actually means)-it only mentions one firm and I have not found anywhere(unless it is in some sort of legalease) that it mentions passing the contract to another company(if that means being assignable).  Big, not sure how/why I would be a massive liability if I were to win in arbitration-because it might set a precedent?  If so there is an example that I found-I believe it was actually a post from one of you guys-that talked about an article in which there was another FA who the same firm went after and they were found to be responsible for loss of commissions and had to pay the FA a few thousand(net-the FA actually had to pay the firm also, but the lost commissions exceeded the amount that he was to pay them.  Also, Times7, in regards to the amount owed-that is a bit fuzzy to me.  It was supposed to be a 5 year agreement-with the firm from St. Louis and the amount to be paid back would be reduced pro rata with each complete year.  I left after completing 3 and 1/2 years so by my calculations the only portion that I could possibly ever be asked to repay is around 11k not 28k.  Thank you for the advice, I really appreciate it.  If you think of anything else, or if anyone else has any guidance it would be appreciated!  Over and out for now!

Nov 12, 2010 6:02 am

Right on, Mudcat. Show your teeth and be reasonable. WTF, this country is being taken over by leeches and unreasonable men. Early in my career, I  had a client complaint  ( actually penned by the orphan account's departed advisor who was snarling and snapping jaws for the business) to my home office, and my mentor showed me how to roll up my pants and show some sausage. Unsheath thy pen throw them a very small bone. Act in a reasonable way, pretend like you are sitting in front of a reasonable judge.

Nov 12, 2010 4:06 pm

Mudcat - it would be difficult to advise you without seeing the contract.  Often we see these "training" contracts are quite different from firm to firm.  We've also seen that the enforcement of these contracts by the firms vary from taking staunch stances to roll-over positions.  Also, I'm familiar with the firm you've described.  I'd advise you to contact an attorney or I'd be willing to review it for you for a free initial consult.

good luck!

Nov 12, 2010 4:20 pm


Mudcat - it would be difficult to advise you without seeing the contract.  Often we see these "training" contracts are quite different from firm to firm.  We've also seen that the enforcement of these contracts by the firms vary from taking staunch stances to roll-over positions.  Also, I'm familiar with the firm you've described.  I'd advise you to contact an attorney or I'd be willing to review it for you for a free initial consult.

good luck![/quote] appears that my "attitude" and the attitude of an actual attorney are similar.  When in doubt with money on the line, consult an attorney. 

Nov 12, 2010 4:46 pm

Great Space. So let's just say, you are going to leave a firm, and go indy. You need help to make sure you stay out of trouble, and if trouble hits, you need to know what happens, when, how much it costs, yada yada.

Having now been through this sh#t storm personally, it would have been nice to be BETTER informed. So, like a reasonable person WOULD DO, i came here. And all I got was a load of BS, very little help, and then I went and did EXACTLY as described and indeed, got an attorney. I would have benefitted so much more, if I'd talk to a few folks that have been through arbitration.

Space, nothing personal, but you're wrong, and you got the wrong attitude about being wrong. Space, do you know the REAL reason why an attorney would spend each day at a website, discussing legal matters? Fortunately for these lawyers, they can do that, meanwhile you and I cannot go to public message boards and describe what we do? And you wanna know why?

Here are a couple things I really wish I'd known a bit more about when I left my prior firm.

How to pick an attorney, you must have one before the trouble starts. If there is no trouble, great, you spent a few thousand bucks, so what...

A TRO process started in Superior Court, and it is the rival firm that initiates this, and this is where the knock out blow could destroy your career, in one single shot. Be sure to follow the legal trail of docs coming to your house, and be sure to legally notify the rival firm that you MUST BE CONTACTED through your personal attorney, with address, fax, phone number, yada, yada...

Be VERY, and I mean very prepared to defend yourself totally and thoroughly at the Court TRO hearing. If you do well here, it can save your career, and tens of thousands of dollars in legal fees. 

Be sure that your attorney is aware that your firm is going to be sneaky about the Court hearing, and make sure there is fax paper and someone minding the fax machine. In my case, it came in the middle of night, 160 some pages, and if it wasnt' for my atty being on the ball, we'd have been a no show at Court, and the rival atty may have gotten a full TRO put on me, costing my probably my entire career, bankrupting me. 

A superior court TRO in any capacity gives you the right to an expedited prelim hearing by Finra. That means 15 days. The idea is, that if you get shut down, you get some relatively IMMEDIATE relief. If there is no TRO against you, but the firm pursues arbitration anyways, it could be many, many months before a hearing.

These hearings are very expensive, and the opposing attorney knows you have a limited budget. So they intentionally drag the thing out, to try to turn it from a one day deal, to two. Great, now you just paid for the room twice, the arbs twice, your attorney is now in for 16 hrs not 8.... Prepare also for the kitchen sink being tossed at you, dirty pool. They'll come after you, humiliate you, try to portray you as a criminal... They're more than happy to lie like heck too, make stuff up, and hide behind jargon and legal bs tactics that might make your head blow right off.  

I could go on, but I hope you are beginning to see my point.    

Nov 12, 2010 4:50 pm

The best advice is to reply

Dear ( name of sender on letter to you)

Re your letter

I do not owe you anything

I do have a contract with you, or the company you purchased

Therefore I dispute your allegations in your letter

under the fair debt collection practices act 15 USC section 1692

 I am advising you to CEASE communication with me

Be advised that any future contact by you or your company violates the FDCPA, and that since you already have my location information, calls made by you or your company to any third party concerning me violates 15 U.S.C. § 1692c of the FDCPA.

In addition, I am keeping accurate records of all correspondence from you and your company. If you continue calling or writting  me, I will pursue all available legal actions to stop you from harassing me and my family.

Goven yourself  accordingly

Nov 12, 2010 5:02 pm

BFP and Spiff -

I think it is very important to have an attorney that understands contractual laws with specific regards to the state laws this guy lives in and the state the company is domiciled in.

I also equally think it is important for someone to hear the "street" version of what they are potentially about to go through.

Only a fool would represent themselves in a legal proceeding and only fool would take legal advice from strangers but to get a "feel" of what someone may go through can be very beneficial.

Nov 12, 2010 5:13 pm

Thanks ND. For business reasons, and liability, an attorney will not tell you everything you need to know. I fully agree that only a complete fool and moron would try switching firms without their own attorny. Even if you are going wire to wire, you'd be NUTS not to have an attorney help you negotiate your new contract, protect you from your former employer, and your NEW employer should something go terribly wrong in the tradition. This atty should be kept confidential as possible when doing a transfer from firm to firm. Let it be your own little secret that you were smart enough to have your own attorney cover your butt.

Nov 12, 2010 6:28 pm

BFP - So with all of your experience in this specific issue, how is your response any different than mine, other than being a lot more involved?  At the end of it, we both told the guy to get a lawyer. 

I wasn't trying to blow the guy off or give him some kind of attitude.  I can't count the number of posters we've had on this site over the years to come here wanting us to solve their problem for them after they've already stepped in it.  The most simple solution for him is to actually ask someone who knows what they're talking about in this case.  He's wasting his time coming here and asking a bunch of anonymous posters on a message board how to handle his very specific situation.  While your situation sounds like it was a nightmare, it is in no way similar to his and your experiences have zero bearing on his case.  If I ever go indy, I'll make sure I remember to PM you and have you rehash your experience again so that I am better prepared.  Mudcat already went indy.  I would have been great had he come on here before he jumped the shark and asked what he needed to do to protect himself.  Therefore, the best we can tell him now is to get an attorney.   

I did get a little snippy with my last post.  I tend to get that way from time to time.  If you thought I was showing too much of my attitude, my apologies. 

Nov 12, 2010 6:35 pm

We're cool Space.

I think we've both gotten our point across.