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Category Archives: Intra-Industry Arbitrations

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Did You Know That FINRA Arbitrations Just Got More Expensive

Posted in Arbitration, Intra-Industry Arbitrations, Public Customer Arbitrations, Securities Litigation

Both the industry and customers liked FINRA arbitration because it was a relatively cost effective dispute resolution forum.  With FINRA Notice to Members 13-21 and effectively doing away with having an industry person on the panel, FINRA has just made arbitration more expensive for everyone. Without any industry presence on the panel, both customers and… Continue Reading

Is This The Beginning Of The End To Arbitrations

Posted in Arbitration, Broker-Dealer Regulation, Intra-Industry Arbitrations

This past week, members of the North American Securities Administrators Association lobbied Congress to do away with mandatory arbitration provisions from customer agreements.  In a speech before this group, SEC Commissioner Aguilar expressed that mandatory arbitration agreements must go.  Would this be a bad thing? Arbitration has be seen as the preference of the industry because… Continue Reading

Oh, Happy Days!! Non-Parties in FINRA Arbs May See Relief

Posted in Arbitration, Intra-Industry Arbitrations, Public Customer Arbitrations

The SEC agreed to a proposed change to the Financial Industry Regulatory Authority’s arbitration rules relating to subpoenas and orders directed towards non-party FINRA members and their associated persons.  See Release No. 34-68404; File No. SR-FINRA-2012-041 (December 11, 2012), and http://www.finra.org/Industry/Regulation/RuleFilings/2012/P158171.  These new rules will allow FINRA arbitrators to issue orders for the appearance of witnesses and… Continue Reading

Arbitration Is Still the King for Resolving Securities Disputes

Posted in Arbitration, Intra-Industry Arbitrations, Public Customer Arbitrations

Both federal and state courts are exceedingly reluctant to halt securities arbitrations.   As an example, a California federal court refused to issue a temporary restraining order stopping a securities customer arbitration.  In fact, the court was somewhat perturbed at even being bothered, indicating that TROs were “for emergencies only.”  See Stanchart Securities International Inc. v. Galvadon,… Continue Reading

Even Unconfirmed, Securities Arbitration Awards Bar Recovery

Posted in Arbitration, Intra-Industry Arbitrations, Public Customer Arbitrations

The Arkansas Court of Appeals approved the dismissal of complaint filed by securities investors because an arbitration award had resulted in other investors losing the same case.  See Elsner v. Kalos Financial Services Inc., Ark. App., No. CA 12-403, 11/7/12, and http://judicialview.com/State-Cases/arkansas/Civil_Procedure/Elsner-v-Kalos-Financial-Services-Inc./10/566455. The court refused to put much stock in the argument that an unconfirmed arbitration… Continue Reading

Is this FINRA’s First Play for RIA Oversight? Opening FINRA Arbitration to RIAs

Posted in Arbitration, Intra-Industry Arbitrations, Investment Adviser Regulation, Public Customer Arbitrations

FINRA is now permitting RIAs to participate in its arbitration process.  The details will be forthcoming. Traditionally, FINRA arbitrations were for broker-dealers to resolve their disputes.  This is a significant opening for FINRA.  Nonetheless, FINRA claims it is ready for RIA cases if the parties agree.  Further, there are differences in standards under federal law for both. … Continue Reading

If Your Client Does Not Understand Your Recommendation, You Need To Do More

Posted in Arbitration, Broker-Dealer Regulation, Dodd-Frank, FINRA Compliance, Intra-Industry Arbitrations, Securities Legislation

The SEC recently completed the Dodd-Frank mandated study on financial literacy for retail investors and it revealed, not shockingly, an absence of basic financial literacy.  The study also found that it was important for retail customers to have a better appreciation of the costs associated with their investments, as well as conflicts of interest related… Continue Reading

FINRA Proposes Rule Changes Relating To Subpoenas In Customer And Industry Disputes

Posted in Intra-Industry Arbitrations, Public Customer Arbitrations

On August 24, 2012, FINRA filed a proposed rule change with the SEC relating to when industry parties seek the appearance of witnesses or the production of documents from FINRA members and individuals associated with the members.  The new rules would require arbitrators, unless the circumstances dictate otherwise, to issue an order directing the production… Continue Reading

Arbitration in the 21st Century

Posted in Arbitration, Intra-Industry Arbitrations, Public Customer Arbitrations, Securities Litigation

We have previously blogged on changes in the arbitration process.  We have seen that commercial arbitration, and, in particular, the securities arbitration process, is undergoing a transformation. The backdrop for these changes is related to the belief that many consider the increased cost in arbitration to be the of the Americanization of the process.  That means, a higher cost for… Continue Reading

PRIVATE GROUP SEEKS TO BAN ACCOUNTS FROM DUAL REGISTRANTS

Posted in Arbitration, Broker-Dealer Regulation, Compliance and Supervision, Dodd-Frank, FINRA Compliance, FINRA Enforcement, Intra-Industry Arbitrations, Investment Adviser Regulation, Public Customer Arbitrations, Registered Representatives, SEC Enforcement, Securities Legislation

Recently, an investor advocacy group petitioned the SEC to prohibit brokerage firms, who offer wraparound accounts, to also provide investment advice through both a duly registered BD and investment adviser.  This group claims that terminating this practice would resolve a very troubling regulatory issue.  The group also petitioned the SEC to ban mandatory arbitration accounts… Continue Reading

Beware of the Arbitration Waiver Issue

Posted in Intra-Industry Arbitrations, Public Customer Arbitrations

The 11th Circuit Court of Appeals recently vacated a FINRA arbitration panel arbitration award because the panel had failed to decide if the securities firm had waived its right to arbitration by engaging in litigation.  The arbitration arose out of a bond offering and a dispute between underwriters.  Ultimately, there was an arbitration award that was… Continue Reading

Beware of Brokerage Firm Arbitrations. . . Tardiness is Unacceptable

Posted in Intra-Industry Arbitrations, Public Customer Arbitrations

The United States District Court for the Southern District of Florida recently determined that, although investors had signed a brokerage agreement after purchasing certain securities, those investors still needed to arbitrate the matter. Certain investors had filed a lawsuit against a brokerage company alleging that they had been defrauded regarding certain stock purchases.  These stock… Continue Reading

PSST!!! Want to Save Money on Your Legal Bills? Read on. . .

Posted in CFTC Enforcement, Federal and State Criminal Activities, FINRA Compliance, FINRA Enforcement, Intra-Industry Arbitrations, NFA Enforcement, PCAOB Enforcement, Public Customer Arbitrations, SEC Compliance, SEC Enforcement, Securities Class Actions, State Enforcement

Late last week, one of my colleagues sent me an e-mail where he copied 8 other people, half of them I could not identify if my life depended upon it.  I then heard about the person who had a Twitter account with over 17,000 follwers, and was now being sued by his former employer over ownership of the account–… Continue Reading

13th Annual FINRA Listens… And Speaks At NYCLA

Posted in Intra-Industry Arbitrations, Public Customer Arbitrations

Great program, 13th Annual FINRA Listens… And Speaks, to be held at the New York County Lawyer’s Association on Monday February 6, 2012 at 5:00 PM at NYCLA. 14 Vesey Street (between Broadway and Church Street), New York, New York.  Katherine M. Bayer, regional director of the Northeast Region, FINRA Dispute Resolution, will speak. This… Continue Reading

National Survey on Restrictive Covenants

Posted in Compliance and Supervision, Financial Industry Trends, Intra-Industry Arbitrations, Registered Representatives

We wanted to make everyone aware of a great resource published by Fox Rothschild’s Securities Industry and Labor & Employment practice groups.  It is called the National Survey on Restrictive Covenants.  You can access a copy by entering or clicking on the following link:  http://emarketing.foxrothschild.com/reaction/RSGenPage.asp?RSID=3H1FlS0GKN33lpQjC7nN5rf9QYXnH3iRCz_uLuiWHMc.  This survey is a quick reference for in-house counsel and human… Continue Reading

Promissory Note Set Back for Firm

Posted in Broker-Dealer Regulation, Compliance and Supervision, Financial Industry Trends, Intra-Industry Arbitrations, Registered Representatives

In a recent FIRNA arbitration decision, a firm suffered a set back when it was unable to recover damages on a promissory note.  One of the interesting facets of this particular case is that, at the hearing, the member firm amended it damage claim to nearly $100,000 more than the number in its statement of… Continue Reading

Securities Podcast with Ernest Badway

Posted in Broker-Dealer Regulation, CFTC Compliance, CFTC Enforcement, Compliance and Supervision, Federal and State Criminal Activities, Financial Industry Trends, FINRA Compliance, FINRA Enforcement, Hedge and Private Equity Funds, Intra-Industry Arbitrations, Investment Adviser Regulation, NFA Enforcement, PCAOB Enforcement, Public Customer Arbitrations, Registered Representatives, Sarbanes-Oxley, SEC Enforcement, Securities Class Actions, State Enforcement

Thought you might be interested in a recent podcast I did concerning my securities law practice.  http://web.me.com/cordpar/Client_Development_Tips/Law_Consulting_Coaching_Podcast/Entries/2011/10/28_Developing_a_Securities%2C_White_Collar_and_Complex_Litigation_Practice.html