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FINRA Arbitration Decides Whether EFL Must Be Repaid When Branch Closes by Bill Singer

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Nov 23, 2010 3:20 pm

A Closed Branch Shuts Door On UBS's Claim for EFL / Promissory Note Repayment

So, here it is. We finally have an answer -- if only in a FINRA Arbitration brought by UBS against a former broker  -- to that ever-popular question posed to me by my registered representative clients:

What if the firm closed my office? Do I still have to repay the EFL? 

This FINRA Panel deserves a round of applause for taking the time to set forth the critical facts -- both pro and con -- and to then issue an decision that succinctly explains how it was arrived at. 

Of note in this case is that the Panel attempted to ascertain the "reality" of the branch's status. Although it appears that some activity occurred at the Aspen branch in question and that the lights were on, the more critical consideration was if the Respondent broker's branch manager told him that the "office was closed immediately and he could no longer solicit new business from the Aspen facility or identify UBS as having an Aspen office."


A Closed Branch Shuts Door On UBS's Claim for EFL / Promissory Note Repayment
Nov 23, 2010 5:29 pm

Wow, that case has huge implications.

In the several years ahead, the number of bank branches and wire houses shutting offices will be record breaking.