Local Law Blogs

Stark & Stark Shareholder Comments on Protocol Overhaul

By Stark & Stark

Thomas B. Lewis, Chair of Stark & Stark's Employment Group, was quoted in the February 26, 2010 Registered Rep article, Some Predict Broker Protocol Overhaul. The article addresses the possibility of an overhaul to the Protocol for Broker Recruiting in the wake of increased lawsuits and constant movement of advisors as they switch firms. When the protocol was first created, it was an exclusive pact between three wirehouse firms put in place to prevent expensive litigation every time an advisor switches firms. Today, there are approximately 420 signatories to the agreement, and recently, some firms are adding letters to clarify their participation in the protocol.

Mr. Lewis states that it could become very unruly if each company began including its own letters and sets its own rules as to compliance or noncompliance with the protocol. Mr. Lewis believes that the protocol will become ineffective at that point, and something has to be done as to the clarification letters because there is no telling where it may stop.

You can read the full article online here. (PDF)

Full post as published by New Jersey Law Blog on March 01, 2010 (boomark / email).