Q: I filed a bankruptcy about nine months ago, but decided afterward to work directly with my creditors instead of defaulting. As a result, my attorney didnt file the required paperwork by the deadline and my bankruptcy petition was dismissed. Since there also was no discharge or other final determination, am I still required to report that I had a bankruptcy on my Form U4?
A: Unfortunately, the answer is yes. The relevant question on the Form U4 is 14K, which asks whether, in the last 10 years, you have made a compromise with creditors, filed a bankruptcy petition or been the subject of an involuntary bankruptcy petition. In your case, from what I understand, you filed for bankruptcy but then allowed the petition to be dismissed when your attorney didnt file the necessary paperwork. There was, in fact, a final determination of your petition, which was that the court issued an involuntary dismissal. In any event, since you did file for bankruptcy, the answer to the question is yes. You would then complete a DRP (Disclosure Reporting Page) disclosing the status of the bankruptcy as dismissed. Additionally, I would point out that you may also need to complete a DRP page about any compromise with creditors that you made concerning those debts. For example, if you established a payment plan with a creditor to pay off the debt over time, or if the creditor agreed to accept less than the full amount owed, that would be considered a compromise with creditors.
Q: I have a longtime client who has been easy to get along with. But recently he was in a car accident and suffered some brain trauma. While he still has all his faculties, he drinks and at night gets worked up and writes me nasty emails complaining about my service and his account. When I bring it to his attention the next day, he apologizes, says he barely recalls writing the emails, and reconfirms that hes happy with me. I hate to fire him as a client, but Im worried these emails might come back to haunt me. What do you think?
A: Id say youre right to be concerned. My first question, however, is: Why does this client have your personal email address? All communications should be going through your firms email system. It probably wouldnt do any good at this point to ask him not to email your personal account, since he barely recalls writing you in the first place. When hes lucid, however, you might want to ask him to delete your personal email. That might not help, though, if he gets worked up and tries to recover the email in other ways. You could delete the account and set up a new personal email for your friends and family (making sure not to give it out to this, or any other, client), but that solves only part of the problem. The bigger issue is what to do about the existing paper trail and how to handle things if his condition worsens. First, you need to let your supervisor and chief compliance officer know what has been going on. You are probably going to be called on the carpet, but your bosses need to know about the situation because they have potential legal exposure as well. To address this, all parties should have an in-person meeting with the client to discuss his situation and his satisfaction with your services. This should be documented and others involved, such as the clients wife and/or legal representative, should also be a part of this conversation. All this may sound like overkill, but I guarantee that if this client should pass away and a beneficiary of his estate were to come across those emails, it wouldnt take much effort for an enterprising lawyer to make your life miserable.
Alan J. Foxman is a contributing writer for On Wall Street, an attorney with the law offices of Rita G. Dew and a senior consultant with National Compliance Services in Delray Beach, Fla.
- Changing Employment Contracts: Negotiate, Accept or Walk Away
- FINRA and the Long Wait
- Coming Clean About Minor Run-Ins With the Law
Register or login for access to this item and much more
All On Wall Street content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access