Broker- Dealer Law Corner

Broker- Dealer Law Corner

Category Archives: Arbitration

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FINRA Proposes To Require Disclosure Of Insurance Information In Arbitrations. Seriously.

Posted in Arbitration, FINRA
Once upon a time, FINRA at least pretended that it was interested in maintaining a level playing field for claimants and respondents in the arbitrations it administers. Today, all that pretense has been jettisoned.  In Regulatory Notice 18-22, which seeks comments on FINRA’s proposal to require respondents to produce information relating to their insurance policies,… Continue Reading

PIABA Lawyers Convince Congress Of The Importance Of Them Collecting Their Attorneys’ Fees

Posted in Arbitration, FINRA, PIABA
I have written before of the ferocious effort by PIABA lawyers to fight for their ability to collect attorneys’ fees on contingency matters – FINRA arbitrations – that they manage to win but which never get satisfied because the respondent broker-dealer has the temerity to go out of business rather than paying the award. PIABA… Continue Reading

Do FINRA’s Proposed MAP Rules Put PIABA’s Concern Over Money Ahead Of Fairness To Members?

Posted in Arbitration, FINRA, MAP, PIABA
I have often used this forum to complain about FINRA’s lack of backbone when it comes to dealing with PIABA, the group of lawyers who represent customers of broker-dealers, principally in arbitrations. Over the years, FINRA has amended its rules time and again in response to loud claims by PIABA that the arbitration process is… Continue Reading

Expungement: Already An “Extraordinary Measure,” FINRA Now Seeks To Make It Even Less Accessible

Posted in Arbitration, Expungement, FINRA
Expungement is a funny thing, and here’s why: for years, claimants’ counsel have complained loudly to FINRA that expungement was being granted too frequently, that legitimate customer complaints were disappearing from CRD, resulting in an unfair, sanitized representation of brokers’ records that put unsuspecting customers at risk.  As Andrew Stoltmann, PIABA’s president, put it so… Continue Reading

FINRA’s Board Acts To Fix The Problem…That FINRA Created

Posted in Arbitration, Board of Governors, Enforcement, FINRA
So, as you undoubtedly recall, in its typical reactive approach to regulation, FINRA has expressed concern – after having concerns expressed to it by others (none of whom are actually from the securities industry, of course) – about (1) the high number of registered reps working in the industry with spotty disciplinary records, and (2)… Continue Reading

FINRA’s Board Continues To Bend In the Wind Of Criticisim

Posted in Arbitration, Board of Governors, Enforcement, FINRA, PIABA, Registered Representative, Rogue rep, Rule 2010, Sanctions
On Wednesday, the FINRA Board met and discussed two topics that I recently blogged about: recidivist brokers and unpaid arbitration awards.  In predictable fashion, FINRA withered in the face of criticism that its existing rules and policies are somehow not tough enough on its member firms, and embarked on a proposed series of steps that,… Continue Reading

Altering Documents In A FINRA Arbitration Can Have Consequences That Go Well Beyond The Arbitration Itself…At Least For Respondents

Posted in annuities, Arbitration, Disciplinary Process, Discovery, Enforcement, FINRA
The FINRA investigative process and the arbitration process exist side-by-side; at times, the misconduct that is alleged by a claimant in a Statement of Claim may simultaneously be the subject of an examination by Member Regulation, or even an Enforcement Complaint. Ordinarily, Enforcement doesn’t pay much attention to what happens in a parallel arbitration, except… Continue Reading

A Miscellany Of FINRA Issues A Little Too Big To Call Nitpicking

Posted in Arbitration, Compliance, Disciplinary Process, Enforcement, FINRA, PIABA, Registered Representative, Sanctions, Wells process
For some reason, a bunch of noteworthy events all happened around the same time this week, so please bear with me as I vent a little about them.  Individually, they are irritating; in the aggregate, they are borderline alarming. First, the FINRA Wells process. I have blogged about this before, and how, in a couple… Continue Reading

PIABA Cries Wolf, Again, To Ensure That Its Lawyers Get Paid

Posted in Arbitration, FINRA, PIABA, Rule 2010
Once again, I found myself gritting my teeth in frustration after reading yet another PIABA report complaining about some perceived inequity in the FINRA arbitration process that cuts against customers. This week, PIABA released its study demonstrating that sometimes when claimants prevail in arbitrations against broker-dealers, the BD that lost is unable to pay the… Continue Reading

The Devil Is In The Details When It Comes To Enforcing Arbitration Agreements With Registered Reps

Posted in Arbitration, FINRA, Form U-4, Registered Representative
It should be abundantly clear to everyone that BDs are required to arbitrate disputes with their registered reps. There are several reasons I can assert this with such a great deal of certainty.  First, and most obvious, there is a rule about it.  Rule 13200(a) of the Code of Arbitration Procedure provides that [e]xcept as… Continue Reading

Correlation DOES NOT Equal Causation: PIABA’s Ongoing Quest to Sully the Reputation of Financial Advisors

Posted in Arbitration, Expungement
Today, the Public Investors Arbitration Bar Association (PIABA) published another hit piece on the expungement process.   For those of you interested, you can find it HERE.   Again and again, PIABA issues press releases and reports contending that the expungement process is broken because expungement is granted at an “alarmingly high rate.”  Let’s start with the… Continue Reading

NASAA’s Model Fee Disclosure Template: Welcome, Regulators, To My World, Where Customers Read Nothing, But Without Consequences

Posted in Arbitration, Disclosure, Fees, FINRA, NASAA
Yesterday, NASAA released a Model Fee Disclosure Template for broker-dealers, urging firms voluntarily to adopt the model as a means of clearly disclosing to customers and prospective customers the types and amounts of various miscellaneous fees that BDs ordinarily charge their customers. Working with FINRA, SIFMA, the FSI, LPL Financial LLC, Morgan Stanley Smith Barney… Continue Reading

Quick Hits: That’s Right. The Hits Keep Coming for Registered Individuals

Posted in Arbitration, BrokerCheck, FINRA, Form U-4, Registered Representative
A couple of events caught my attention this week and, since they are related, I thought I’d address them together. On Monday, the SEC announced a proposed rule change to FINRA Rule 8312, the FINRA BrokerCheck Disclosure Rule. Rule 8312 permits FINRA to disclose certain information on BrokerCheck about registered individuals. As many of you… Continue Reading
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