FINRA Creates Arbitration Task Force

The Financial Industry Regulatory Authority (“FINRA”) has formed a 13-member Arbitration Task Force in an effort to “improve the transparency, impartiality and efficiency” of the arbitration process.  Arbitration is a formal dispute resolution process for disputes and complaints arising out of investors business dealings with any FINRA brokerage firm.

Richard Ketchum, FINRA Chairman and Chief Executive Officer said “ This task force brings together a diverse group of leading investor advocates, academics, regulators and industry representatives, and I am confident that their recommendations will help ensure FINRA’s arbitration process continues to serve the needs of the investing public.” The task force will be made up of seven (7) public members and six (6) industry members that include securities lawyers, industry officials and investor advocates.

The current arbitration procedures have been controversial as critics and investor advocates contend that arbitrators do not have enough training, have a favorable bias toward Wall Street or have not undergone background checks.  The task force, FINRA’s recent Expungement Rule Approval, and its proposed rule change to amend the Code of Arbitration Procedure for Industry Disputes to determine eligibility as a public arbitrator, are all signs of FINRA’s mission to improve the arbitration process.

The task force will complete its review next year and make recommendations to the National Arbitration and Mediation Committee which is part of FINRA’s Standing Board Advisory Committee.

JLG will keep you posted as findings are unveiled.

For further information on this and other related subjects, please contact us at info@jackolg.com  or (619) 298-2880.

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Filed under FINRA, Investment Advisers, Investors, SEC

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