New York Securities Fraud Lawyers Blog
Thinking about leaving your broker-dealer? Looking to make the transition to a new firm?
It has been reported recently that brokers from Credit Suisse, Deutsche Bank and potentially Merrill Lynch are being heavily recruited to leave and join new broker-dealers. For those leaving Credit Suisse, Deutsche Bank, and Merrill (as it is for any FINRA registered representative) the choice to move to a new broker-dealer is not one that is made lightly. Whether a protocol move or a non-protocol move, many of the same issues remain at the forefront and need to be dealt with judiciously. One of these issues is the transition bonus/promissory note.
If you are fortunate enough to have a substantial book of business and significant gross production, you may have been offered an upfront transition bonus by a new broker-dealer. Frequently, these bonuses are awarded to reps in the form of Forgivable Promissory Notes. The basic structure of these “Notes” is as follows: The “bonus” is structured on paper as a loan. Over a set time period – usually five to seven years – the balance of the loan, including interest, is paid off or “forgiven” by the broker dealer.