March 30, 2007
Form U-5 Statements Have Absolute Privilege, New York Court Rules
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).
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