Continuing on in this series on the Form U4, in this post we'll address some issues regarding disclosing customer complaints, litigation and arbitration.
On the Form U4, Items 14H & 14I seeks information on civil judicial cases and customer complaint/arbitration disclosure. Here, applicants are instructed to disclose any “investment-related” matters under these questions. Again, investment-related is specifically defined and on the U4 is much more broad than securities. According to the definition, it encompasses insurance, real estate, and commodities along with securities. So, be cautious to not limit your answers to the U4 to just broker-dealer or investment adviser issues, but to answer completely with the broad definition of investment-related used by the U4.
Also, as Joel explains in this video, pay attention to dollar amounts in the questions, and also whether you are the subject of the complaint or litigation, even if you were not specifically named in the complaint or lawsuit. Problems can arise when not reading the questions, and the U4 instructions carefully when answering the questions, or when misunderstanding these questions and definitions.
If you have a question about whether a matter is required to be reported on your Form U4, seek knowledgeable counsel. If you'd like to discuss your situation with an experienced securities regulation lawyer, please contact us.
You can learn more about Form U4 Issues by visiting these other blog posts in this U4 Basics series:
Form U4 Basics: Part 1 – An Overview of the Form U4
Form U4 Basics: Part 2 – The Little Known Lifetime Bar
Form U4 Basics: Part 3 – Criminal History Disclosures
Form U4 Basics: Part 5 – OBAs, Regulatory Events and Terminations
Form U4 Basics: Part 6 – Disclosure Issues Beyond the Form U4
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