Thursday, February 24, 2011

Personal Bankruptcy and FINRA Registration

Can I get registered with FINRA if I've ever declared personal bankruptcy?

This is a question I receive frequently, though not as frequently as the question, "Can I get registered with FINRA if I have a felony conviction?"

Both issues are covered on the U4 and, of course, you never want to lie on your U4, especially if you might get caught. However, a "yes" answer to these sticky questions does not automatically lead to a denial of your application. It's just that a "yes" answer to any felony conviction or any misdemeanor considered "investment-related" is usually a game-over for the applicant. What if you answer "yes" to questions about your personal finances? Let's see how FINRA handles this FAQ:
A personal bankruptcy is not an automatic diqualification from FINRA registration. However, you are required to report and disclose a personal bankruptcy that occured in the previous 10 years. You are required to keep the information on your U4 current at all times and any changes to your disclosure must be made within 30 days. Your firm will help you correctly answer specific questions about bankruptcy on Form U4 and will electronically submit the Form U4 amendment on your behalf.


  1. Thanks for this post, it speaks exactly to the situation I am facing at the moment. I filed bankruptcy in September of 2010 and am about to register to take the Series 7 exam. As noted, FINRA expressly states that "A personal bankruptcy is not an automatic disqualification."

    Great news, but is there any more? If my bankruptcy is accepted by my employer, do I have anything else to worry about with FINRA? In what instance might FINRA disqualify my application with a bankruptcy even if my employer is aware and still willing to hire me? And if FINRA disqualifies me, can my hiring firm appeal or help in any way? Any and all additional information you have would be very helpful.

    Many thanks.

  2. As far as I know, FINRA is not going to disqualify you based only on a bankruptcy. You'd have to have some sort of disciplinary history or criminal history to have your U4 denied, to the best of my knowledge.

  3. Nothing criminal or diciplinary, so I hope all goes well. Thanks for the blog and the comment.

  4. Follow-up: I was cleared by FINRA to sit for the Series 7 today.

    1. Can you tell me the name of the firm/ bd? I need a bd like that for me. We will unite!