A registered rep at my firm got into trouble at his previous employer. I think FINRA is likely to bar him from the industry. Since he is in his mid-60s, he’s considering retiring from the business and wants to sell his book of business to another rep. If he sells his book for a fixed amount to be paid on a monthly basis, would that be legal?

FINRA Rule 8311, which was amended  effective last month, prohibits payment of any “remuneration that the person might accrue during the period of the sanction or disqualification.” The interpretive material for the rule says, however, that you “may pay or credit to a person that is the subject of a sanction or disqualification … remuneration that … accrued to the person prior to the effective date of such sanction or disqualification” (except for remuneration relating to the activity that caused the sanction).

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