Sterlington Secures Rare FINRA Record Correction in Clear Street Whistleblower Case  

Sterlington Secures Rare FINRA Record Correction in Clear Street Whistleblower Case  

Sterlington obtained a preliminary injunction in the U.S. District Court for the Southern District of New York on behalf of four whistleblower broker-dealers, requiring their former employer, Clear Street, a financial technology and brokerage firm, to correct FINRA filings that falsely described them as discharged for cause. The court found that Clear Street made the filings as “an opportunity to inflict harm” on whistleblowers.

The four broker-dealers resigned voluntarily after raising concerns about legal and regulatory violations at Clear Street. Anticipating retaliation, Sterlington notified Clear Street that it would seek emergency relief in federal court. The next morning, hours before Sterlington filed suit, Clear Street filed Form U5s, the termination notices FINRA-member firms submit when a registered representative leaves, branding the broker-dealers as discharged for cause. Those filings are visible to future employers, regulators, and clients.

“These broker-dealers raised concerns about compliance and were punished for it,” said Sterlington litigation partner Courtney Rockett. “Courts rarely compel a firm to correct a Form U5, and these filings follow a broker-dealer for an entire career. This result protects their reputations and livelihoods.”

After a two-day evidentiary hearing in November 2025, U.S. District Judge Analisa Torres issued a temporary restraining order barring further adverse action against the broker-dealers. Clear Street then filed a duplicative action in the New York Supreme Court Commercial Division seeking relief to countermand the federal court’s order. That state court denied its requests for a temporary restraining order and expedited discovery and stayed the case because it overlapped with the federal proceedings. In all, four judges in two courts ruled against Clear Street: Judge Torres and Magistrate Judge Robert W. Lehrburger in the Southern District, and Justices Andrew Borrok and James d’Auguste in the Commercial Division.

In denying Clear Street’s motion to seal, the federal court rejected its central defense that the broker-dealers had shared, or intended to share, trade secrets with their new employer. Judge Torres then granted Sterlington’s motion for a preliminary injunction in full in June, finding Clear Street’s defenses pretextual. Clear Street argued that a heightened standard of proof applied. Judge Torres found it unnecessary to decide the question because the broker-dealers were “entitled to relief even under the heightened standard,” a conclusion she reached after considering 81 pages of post-hearing affidavits from six additional Clear Street witnesses.

Litigation partner Courtney Rockett led the Sterlington team, which included counsel Alyssa Pronley and associates Jarrett Field and Allyesha Hall.

The case is Batanjany et al. v. Clear Street Management LLC et al., No. 1:25-cv-08420 (S.D.N.Y.). The action is stayed pending arbitration.

About Sterlington

Sterlington PLLC is a full-service law firm focusing on complex corporate, litigation, executive compensation, and private wealth matters. As a firm, we focus on the economic as well as the legal aspects of our matters.

Among other strengths, Sterlington is the ultimate law firm for private capital, family offices, founders, and senior executives, as well as their related businesses.

Visit us at www.sterlingtonlaw.com.

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