By Alan Wolper on Posted in Arbitration,FINRA,PIABA,Rule 2010Once 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
By Alan Wolper on Posted in Arbitration,FINRABack when I was a Director of NASD’s Atlanta District Office, I spent a lot of my time apologizing to the approximately 500 member firms my office regulated about the quality of the arbitration process. Almost uniformly, broker-dealers held the view that it was not just flawed but broken, that it was unfair (tilted in… Continue Reading
By Alan Wolper on Posted in Arbitration,FINRA,Form U-4,Registered RepresentativeIt 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
By Nathan Lamb on Posted in Arbitration,ExpungementToday, 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
By Alan Wolper on Posted in Arbitration,Disclosure,Fees,FINRA,NASAAYesterday, 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
By Nathan Lamb on Posted in Arbitration,BrokerCheck,FINRA,Form U-4,Registered RepresentativeA 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
By Chris Seps on Posted in Arbitration,Discovery,FINRA,Registered RepresentativeI’ve previously posted about my frustration with the way the discovery guide is written, with particular attention focused on List 1 Item 10. See my prior post here. Item 14 causes me similar angst. Why? Because Item 14 is so poorly worded that, if read literally, almost no audit report will ever be responsive to it.… Continue Reading
By Chris Seps on Posted in Arbitration,Discovery,FINRA,Registered RepresentativeFINRA’s Discovery Guide for Customer Disputes is not perfect. I think that FINRA would be the first one to admit that – which is why the Discovery Guide adopted under the Code of Arbitration Procedure for Customer Disputes has been revised three times in the past five years, and a task force has been set… Continue Reading
By Nathan Lamb on Posted in Arbitration,FINRABy now, it should be clear, we are oft to criticize FINRA in this blog. Much of that criticism is self-inflicted by, in our view, their unfair or unreasonable decisions. But, in a departure from the norm, I want to recognize an instance when FINRA is getting something right. Effective this Friday, there will be… Continue Reading
By Chris Seps on Posted in Arbitration,Disciplinary Process,Enforcement,FINRA,Mediation,SettlementsI recently had two clients, both respondents in pending matters – ask me the same question in the same day: should I mediate this case? The answers I gave them differed dramatically, not just because the facts of each case were very different, but because one case was a customer arbitration, where we are defending… Continue Reading
By Nathan Lamb on Posted in Arbitration,FINRA,Rule 1250,Senior InvestorsIn a recent blog post, I wrote about the challenge a rapidly deteriorating change in mental capacity can cause BDs and RRs alike. Often, we are asked to speak to groups and firms, and this subject is a popular one. In my view, there are a couple of reasons for this development. First, FINRA has… Continue Reading
By Alan Wolper on Posted in Arbitration,FINRAI recently had the extremely unhappy experience of losing a FINRA arbitration following a week-long hearing. Fortunately, this tends to be a rare occurrence around here, but that’s not really a surprise, since we tend to go to hearing only in those cases with strong facts, while we work hard to settle those with difficult… Continue Reading
By Alan Wolper on Posted in Arbitration,Enforcement,FINRAFINRA recently passed an amendment to the Code of Arbitration Procedure which provides that arbitrators no longer have to wait until the end of a case to make a disciplinary referral. Now, panelists are free to make such a referral in the middle of a hearing! My first observation is: was there really a need… Continue Reading
By Alan Wolper on Posted in Arbitration,FINRAAnyone who’s handled FINRA arbitrations is well familiar with panelists who regularly respond to evidentiary objections by overruling them, but with the admonition that they will only give whatever weight, if any, to the evidence that they deem appropriate. While that can sometimes be frustrating, it is understandable. The Federal Arbitration Act, and the many… Continue Reading
