By: Stephen P. Lagoy
The Financial Industry Regulatory Authority (FINRA), which administers the arbitration program to which brokerage customers must bring their complaints, is considering using arbitration panels comprising all “non-industry” members. Presently, panels must include at least one industry member among the three-person panel. The remaining member(s) are “public” (i.e. from outside the brokerage industry). FINRA is now running a pilot program that allows parties to choose an all-public panel. This move may be in response to public criticism of FINRA’s arbitration program as being too lenient on brokerage misconduct. For more on the FINRA program and how securities arbitration works, see Forexyard News.
If you would like to know more about arbitration and how it may be used effectively as an alternative to court litigation, please call Stephen Lagoy.