October 30, 2007

They continue to be highly troublesome to employers in the brokerage business who are obliged to fill out a form ("U-5") explaining why they are terminating a broker-dealer. Michael Fox has details on a recent case against Merrill Lynch. A New York appellate decision recognized (as to terminations in that state only) a privilege for such statements by brokerages, grounded in the public interest in not chilling revelations that might protect consumers in the future, but there are signs arbitrators may be finding ways to get around that ruling.