Well, maybe after the 7 years come off. I know at our firm we simply asked have you "ever" in your life declared bankruptcy and if the answer was yes, we wished you luck. We just were not interested in that business. Plus it brought a LOT of regulatory scrutiny towards us. Our SRO had us file paperwork that we have vetted all our clients and deem them appropriate to join our JBO. If we turned a blind eye to this it would welcome an audit.
Got it...thx. I knew someone what owed the IRS $125,000. They put a lean on his earnings and it hit his U4. They fired him. He is now unhireable.
Ok, I forgot about this question, it's been awhile since I traded prop and filed out the U4. Indeed, it does ask if you filed bankruptcy. Page 14, Question 14K, it's clearly asked under "Financial Disclosure" in the U4 form. However, it's not asking whether you filed "ever" in your life, just in the past 10 years. https://www.finra.org/sites/default/files/form-u4.pdf
Yeah we had an additional form that was firm specific that asked if you ever filed. Part of the "know your customer" check.
Maverick74, I'm sure if you remember, but I was in your firms NYC office for a year (April 2010 to April 2011). I only remember them caring about how much money I was depositing. To be fair, they never pushed me to trade. Bob
No Bob, I ran the Chicago office and I absolutely was given orders to reject traders who had bankruptcy issues. In fact, we ran credit checks on traders and turned guys away who simply had bad credit. You may have been given a pass with regards to your background but I got my ass chewed out when I made an exception for a buddy who had a shaky credit history and when he blew out and didn't pay his debt, I PAID it! Yeah that was fun. Herb was very tough on that stuff. We got audited one year and the SRO was asking us why we had all these guys in our JBO with questionable backgrounds when we were billing ourselves as a "professional trading operation".
I knew you were in the Chicago office. My credit was perfect. I had no issues but another guy from the Amex that joined at the same time did have issues. His X-wife did a number on him.
Not to be judgemental but I collected data on at least the guys in my group and there was a pretty strong correlation with guys with credit issues and the probability they blew out their account, had a negative balance and refused to pay us. The guys with good credit didn't seem to have this issue. I'm not judging everyone with bad credit here as I know everyone has a story to tell, but in my experience the risk is not worth it. Whatever you make on commissions you will lose when they blow out. The losses we had to absorb due to guys blowing out was substantial. Spoiler alert: my firm is no longer a going concern.
I agree. The deposits at your firm were much higher than others, because most of us were option traders. I think the minimum was $100,000. More than half the option guys in my office were naked option sellers. I would say most did not have money or credit issues. It was just that one guy.
I would say half of my guys came in with 100k to 250k. Another 25% between 50k and 100k and I made some exceptions and bought in a few guys with under 50k. It was mind boggling to me how even the guys with 100k to 250k were so anxious to blow all their money. The small guys didn't have a chance obviously.