Legal Question in Investment Law in California

I owe money on 2 separate notes to 2 separate financial services firms. I am in a situation that I need to file chapter 7 bankruptcy. I know this will eliminate the debt, but will FINRA still be able to suspend my Series 7 license if I don't owe the debt any longer?

Asked on 2/11/13, 3:06 pm

2 Answers from Attorneys

Robert Kubler The Kubler Law Firm
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I'm not licensed to practice before FINRA but section 525(b) of the Bankruptcy Code specifically and emphatically prohibits discrimination by an employer based on the employee's having taken advantage of a right created by federal statutes....

If you have an problems though you will probably be required to go to arbitration per FINRA member agreements. Best to contact a FINRA attorney as fees and suspension can be very costly.

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2/11/13, 3:35 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law
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There is some discussion of this topic on line, via Web sites accessible through a Google or Bing! search. Here's a link to one of them:

http://www.ehow.com/info_8511790_bankruptcy-affect-series-7-license.html

Apparently, you can get into trouble with FINRA for failing to report your bankruptcy filing within 30 days, but not for the bankruptcy itself. Apparently, however, your employer is where you might find some subtle or not-so-subtle retribution -- even though, as Mr. Kubler points out, this is prohibited by 11 USC 525(b).

I recommend you do some additional on-line research using search terms including "FINRA" "license" and "bankruptcy" but if you HAVE to file bankruptcy it looks as though in a sane and law-abiding world you'd be OK.

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2/11/13, 6:22 pm

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