It was reported yesterday in AdvisorHub (Fired UBS Broker, a Hunting Show Host, Gets to Keep His Half-Million-Dollar Note Balance by Mason Braswell) that UBS was unable to enforce repayment of the outstanding balance on its promissory note in a FINRA arbitration against a broker it terminated for allegedly violating conflict of interest policies – failing to disclose client relationships. While not the norm, there are circumstances, albeit limited, under which financial advisors will prevail in a promissory note dispute before FINRA. Here, the broker claimed he had previously disclosed his activities to UBS and his managers, and provided client testimony that the broker was not involved in any business referral. The broker was able to prove that UBS, through its branch manager, was aware of the broker’s activities and apparently did not stop his activity. While the unpaid balances are typically due upon termination of employment, where wrongdoing (which is defined on a case-by-case basis) on the part of the company is found, it may result in all or partial forgiveness.
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