I sometimes (well, perhaps frequently) use this blog as a vehicle to complain about certain things that FINRA does, or about certain of its rules, that I feel are just unfair, plain and simple. To show you that I am not simply making this up, I experienced two such events this past week, which I
Code of Arbitration Procedure
FINRA’s Board Continues To Bend In the Wind Of Criticisim
By UB Greensfelder on
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…
Pick Your Poison: Given What A Jury Can Do, Is Arbitration Really That Bad?
By UB Greensfelder on
Posted in Arbitration, FINRA
Some of my clients simply cannot enough bad things about the arbitration process. It is expensive. It is unfair. There’s no industry panelist anymore. Claimants can get away with anything. Panels are sometimes comprised of people who care more about how many sessions they can get paid for than the merits of the case. Or…
Altering Documents In A FINRA Arbitration Can Have Consequences That Go Well Beyond The Arbitration Itself…At Least For Respondents
By UB Greensfelder on
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…
PIABA Cries Wolf, Again, To Ensure That Its Lawyers Get Paid
By UB Greensfelder on
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…
FINRA’s Arbitration Task Force Issues Its Final Report: Law Shmaw
By UB Greensfelder on
Posted in Arbitration, FINRA
Back 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…
The Devil Is In The Details When It Comes To Enforcing Arbitration Agreements With Registered Reps
By UB Greensfelder on
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…
FINRA Discovery Guide’s Misguidance: Part 2
By Chris Seps on
I’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…
If You’re a Respondent, Time is NOT on Your Side
By UB Greensfelder on
Posted in Arbitration, Defenses, Disciplinary Process, Enforcement, FINRA, Registered Representative, SEC
There was a decision this week from the D.C. Circuit Court of Appeals on an appeal of a decision by a respondent who – stop the presses! – lost an SEC administrative proceeding, and then lost his appeal to the SEC. Montford and Company, Inc. v. SEC, No. 14-1126 (July 10, 2015). One of…
FINRA Discovery Guide’s Misguidance: Part 1
By Chris Seps on
FINRA’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…