Friday, March 30, 2007
The New York Court of Appeals held that brokerage firms have an absolute privilege against defamation suits with respect to statements made on the U-5 Forms filed upon termination of a broker's employment. Previously, the law was unclear whether the privilege was absolute or qualified. Answering a question certified to it by the 2d Circuit, New York's highest court (in a 4-2 decision) said that absolute privilege followed from the "Form U-5's compulsory nature and its role in the NASD's quasi-judicial process, together with the protection of public interests." Rosenberg v. MetLife, 2007 WL 922920 (Mar. 29, 2007).