Former Executive Would “Lose Sleep” Over Form U5 Wording When Terminating Employees

FINRA introduced its National Cause and Financial Crimes (NCFC) Detection Programs in 2020, that, among other responsibilities, investigates member firms based on events or information it receives that raise concern. According to Steven Price, NCFC’s Senior Vice President, the wording of a U5 Termination form and U4 Application form is “the number one source of FINRA inquiries into firms and brokers.” Price explains how, as a former BD executive, he “lost sleep over how [to] word Form U5s,” acknowledging that it’s a balancing act as “firms often are concerned about their legal exposure when they terminate an employee, but they also have to battle with FINRA’s guidance.”

Think Advisor – Form U5 a Top Trigger of FINRA Investigations