Employment Expertise

With over 30 years of industry experience and advanced quantitative capabilities, Bates Group is well positioned to support a wide range of pre-, during- and post-employment litigation, due diligence, investigation and compliance-related matters. Bates substantive consultants and employment experts are proven industry professionals with experience in sales practice, supervision, suitability, employment investigations, regulatory reporting, recruitment, contract negotiation, bonus plans, compensation agreements, and the onboarding and termination processes.

Our financial services experts and consultants also provide damages and compensation analyses, including past and future earnings models, what-if scenarios and tax consequences. We have significant experience in assisting counsel with claimants’ damages models, the impact of underlying assumptions, and the application of market/industry considerations.

Our Compliance team supports financial institutions with due diligence reviews, gap and risk assessments of personnel, and enhanced supervision.

Bates Group provides consulting and expert testimony for matters involving:

  • Supervision
  • Fiduciary Duties 
  • Forms U-4 and U-5 Defamation
  • Promissory Note Disputes
  • Negligent Hiring and Wrongful Termination
  • Breach of Confidentiality and Non-Solicitation Agreements
  • Trade Secrets Theft 
  • Indemnity and Contribution Actions 
  • Whistle-Blowing and Retaliation Claims
  • Compensation Packages 
  • Internal Investigations (Related to broker conduct) and Regulatory Compliance
  • Sexual Harassment (Including non-securities employment and H.R. issues)
  • Wage and Hour Claims

Bates Compliance supports:

  • Regulatory Reporting (Including Form U-4 and U-5 filing requirements and Form BD and IAR disclosures)
  • Compensation Plans, Conflicts and Incentive Awards
  • New Hire Due Diligence Review 
  • Personnel Risk Assessment 
  • High-Risk Rep Reviews and Enhanced Supervision 
  • High Risk Broker Exam Review

For more information about Bates Group and our employment expertise, please contact:


Julie Johnstone, Managing Director, Retail Litigation Practice – jjohnstone@batesgroup.com

David Birnbaum, Managing Director – dbirnbaum@batesgroup.com

The following are a few examples of recent engagements:

Wrongful Termination

Bates was retained on behalf of regional B-D regarding wrongful termination and U-5 defamation claims brought by a former registered rep who was terminated for failing to disclose that an elderly customer and long-time family friend had named him as a beneficiary to a fixed rate annuity which the rep claimed he purchased for her through an approved outside business activity.

Market and Fees Analysis

Bates was retained on behalf of a national B-D in a matter where the claimant alleged that the firm misrepresented the capabilities of its Private Client department, which allegedly impeded him from transitioning and retaining clients. With analysis from Bates, our client was able to demonstrate that its platform’s capabilities met industry standards, and that many existing clients did not transfer assets to the claimant because they were dissatisfied with the investment advice he previously provided. We were also able to show that the FA was motivated to change firms solely on the basis of being able to monetize his business based upon a production year that he knew he could not replicate at any firm, including the one from which he resigned. Bates Group presented significant analysis of the FA’s fee and commission history measured against his assets under management as well as a market analysis that demonstrated most of those prior commissions were created by trading activity in corporate bonds due to historically high yields at the time. We also showed that volume in this market declined significantly after the FA moved his business.

U-4 / U-5

Bates was retained on behalf of a national B-D/RIA regarding wrongful termination and U-5 defamation claims. The rep was terminated for his failure to notify the firm of a change of office address, failure to report a money judgment/award in divorce proceedings, and refusal to sign a Form U-4 amendment.

Economic Damages

A Bates quantitative expert was engaged to evaluate and quantify economic damages as part of a constructive termination claim by a former FA. Bates prepared analyses comparing historical individual performance data versus the actual performance at the new firm and the hypothetical growth of performance, and determined the value of employment at the prior firm versus new firm actuals, taking into account the real and future value of the forgivable loans and promissory notes. We were able to show uncharacteristic increases in sales/production totals in the year leading up to the transition by reviewing the asset turnover in depth. We determined that trailing 12-month amounts were a result of what may have been a pattern of churning specific accounts and product types at the prior firm to inflate gross production amounts versus assets under management prior to transaction.

Commissions Analysis

Bates was engaged in an employment dispute related to a very high-producing financial advisor hired during the financial crisis. The advisor claimed that regardless of the crisis, he would have been able to produce significantly more revenues/commissions (based upon his past success) if he had been given the proper support/resources. Our expert testified regarding the type of business the advisor was doing and completed an analysis of commissions the advisor reasonably could have generated in the context of the brokerage’s product platform and client service model, as well as the broader financial crisis. The analysis included contextual charts illustrating the markets for Asset Backed Commercial Paper, Auction Rate Securities, Money Market Funds, short-term Treasuries and other saleable securities.

Contact Bates Group

Bates Group is with you every step of the way. Contact us today for more information on how our End-to-End Solutions can help your firm.

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