David R. Chase, P.A.
Call Us Now: 800-760-0912
David R. Chase, P.A.
Call Us Now: 800-760-0912


Legal and Equitable Defenses to a Stockbroker Promissory Note or Employee Forgivable Loan FINRA Arbitration Claim

Under the law, there are several key legal and equitable defenses available​ to a financial advisor who finds himself defending against a promissory note or employee forgivable loan FINRA Arbitration case filed by a former employing broker-dealer seeking the unpaid balance on a note or forgivable loan.

While there are variances in state laws, and the facts in a particular case may or may not support the defense, the following are several of the key legal and equitable affirmative defenses I have previously used in the successful representation of my broker clients in promissory note FINRA arbitrations:

  1. Fraudulent Inducement
  2. Negligent Misrepresentation
  3. Inequitable Conduct
  4. Unclean Hands
  5. Breach of Contract
  6. Impossibility of Performance
  7. Breach of Covenant of Good Faith and Fair Dealing
  8. Constructive Termination
  9. Setoff

Some of these affirmative defenses may also serve as a basis for a counterclaim, in which the broker counter-sues the brokerage firm for money damages.  Counter-claims, when supported by compelling facts, can serve as tremendous leverage in facilitating a favorable settlement of the case.

While stockbroker promissory note and employee forgivable loan cases are tough to win, with the right facts and the strategic pleading of legal and equitable defenses — coupled with a strong counterclaim — advisors have a fighting chance.

If you are a registered representative who was fraudulently recruited and induced into signing a promissory note under false pretense, or who has suffered financially due to a material change in firm policy that rendered you unable to successfully conduct business — and have been sued by your former employer on your promissory note, or employee forgivable loans, please contact David Chase, Esq. for a free consultation at david@davidchaselaw.com or toll free at (800) 760-0912. Mr. Chase is a former SEC Prosecutor and securities attorney.

The Firm represents financial advisors nationwide in promissory note and employee forgivable loan cases before FINRA.

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