BD Law Blog - by Georgia Securities Lawyer Joel Beck

Form U-5 Disclosure Afforded Absolute Privilege In NY

The U.S. Court of Appeals for the 2nd Circuit affirmed a lower court's decision and held that disclosures on a Form U-5, under New York law, are absolutely privileged, and dismissed the libel claims brought by a former registered representative of a broker-dealer.  In Rosenberg v. Metropolitan Life Insurance Co., (2nd Cir., No. 05-4363-vc, June 14, 2007), the Court dismissed libel claims against the firm stemming from a Form U-5 the firm filed disclosing that one of its former representatives appeared to have been involved in money-laundering violations and had apparently violated some firm policies regarding speculative insurance sales.  The Court held that in a defamation action, the employer's statements on a Form U-5 "are absolute ly privileged under New York law."  The Decision can be found at the Court's website.  We'll watch to see if this arises in other jurisdictions. 

The Cat is Out of the Bag

On June 20, 2007, in a speech at The Exchequer Club in Washington, D.C., Mary Schapiro announced the name of the soon to be created self-regulatory organization created by the merger of NASD and NYSE Regulation.  The new SRO will be known as SIRA, the Securities Industry Regulatory Authority.  See her speech at June 20th Speech.