Brokerage firms have used forgivable loan and promissory note agreements as inducements to either hire new brokers and/or compel their current brokers to keep their book of business with their firms. Notably, these agreements oftentimes include overreaching covenants not to compete and/or covenants not to solicit, with which firms seek to compel, restrain and handcuff brokers from leaving their firms.
Oftentimes, brokers who are parties to such agreements endure trade practice violations, commission cuts, forced sharing of their book of business, age based discrimination and management pressure to sell to proprietary and/or unsuitable investments to their clients.
Brokers laboring under these commissions can be left with no option but to leave their firms to avoid ethical, regulatory, legal and conflicts of interest violations. Departing brokers have been successful under these types of circumstances as noted in FINRA Case No.12-01106 Ayers v. Morgan Stanley.
We offer a free initial consultation to registered representatives laboring under promissory notes and forgivable loans who have been forced to leave their broker dealers in order to protect their clients’ best interests. For an appointment contact the Law Offices of Timothy J. O'Connor at (518) 426-7700.