Posted On: October 31, 2010

FINRA arbitration panels have historically been three person panels of screened, qualified licensed arbitrators. Drawn from diverse backgrounds in the securities industry, law and business, arbitrators are approved, licensed and listed as available. When a dispute is submitted to FINRA for resolution, the parties select the three-person panel from a list of approved FINRA arbitrators. Arbitrators are licensed either as "Public" or "Non-Public". A distinction with a major difference: go to FINRA's website for an explanation. A pilot program run by FINRA concluded recently found that investors, by a 60% factor, selected all "Public" arbitrators. The result prompted FINRA to propose a rule change allowing all "Public" arbitrator panels. Over 500 cases have been arbitrated under this pilot program. The purpose of the study is to determine the public perception of the fairness of panels. The two year study will conclude next year and may result in changes in panel members. The proposed rule allows the selection of an all "Public" arbitrator panel. The proposed rule change requires SEC approval, which is expected. The problem was created by FINRA (formerly NASD) by the designation of arbitrators as either a 'public' or 'industry' arbitrator. The ill-chosen designations suggest that the arbitrators are inclined to side with a private individual or side with the industry. This is not the case, but it is the perception: that is the reason for the rule change. If FINRA had it's socks on correctly they would drop the designations and just list arbitrators and their backgrounds and let the complainaint and respondent select.

Pre-Pay your Rolls Royce lease or turn it In: change is a’comin!

Posted On: October 30, 2010

Deer hunters know that the last day to see a four-pointer is the day before season opens. Rumors persist that deers shill for licenses to know opening day. And the best indicator of a falling stock market is the stiring of Securities Fraud Chartists, put down your charts. Counting dead-headed trucks? El Nino? Burpee seed catalogs? Forget it!! The penultimate, most reliable and proven indicator of the stock market are the bottom feeders we all love to hate, but keep on our speed dialers….Stock Broker Fraud Lawyers! Yes, they have cancelled their ski chalet reservations, sped up their divorces, and stoked their advertising budgets…the stock market's next quarter has been revealed! In the past month those practitioners who feast on market losses (claims by abused investors) have come alive. We are taking on staff, renting bigger offices and pricing those big Benz’s because we know that when the market falls our phones start ringing. Next Spring I will post my color selection of 2011 Bentley’s purchased by the misdeeds of today’s hottest stock brokers….soon to be your villain of focus. What to do? Start reading up on stock broker fraud lawyers so you have someone to call when you see your March 2011 statement. I’m not gloating; I’ve just been here since 1976.


Posted On: October 26, 2010

This may disturb you, but it's just grist for the mill here. When you charge a broker with fraud or self-dealing or communications failures some brokers can go into their office computers and change statements. Brokers have been caught doing this, they have been fired, some face criminal charges… Prison food doesn't compare to steak dinners paid for with your money. Here's a message: keep your statements! Go to Office Depot buy yourself a plastic tub or cardboard box and throw them in, not out with the trash. Why? If I'm in arbitration with you on my side and I show the arbitrators a monthly paper statement which has a transaction……then I show the arbitrator what the broker submitted in response to a subpoena. If they don't jive: the glove don't fit. Major fireworks, major trauma, the arbitrators tell the brokerage house to write you a check. It's a sure win for the claimant in arbitration when the broker changed computer records. It happens, sadly. So here's the message: keep those paper records.


Posted On: October 23, 2010

What is NASD? It is now FINRA. It's mandate is to regulate most contact and transactions between securities industry "regulated individuals" and consumers. The securities industry is largely regulated by this non-governmental agency which exists to produce guidelines and standards and to enforce securities laws regulating ‘regulated individuals’… People who work as stockbrokers and financial advisors. It's most important function, for you and I, is that it is the place we can go to resolve a dispute with a regulated person: a stockbroker, a financial advisor, a wire house, a financial professional who is in the business of providing financial services and selling financial products to individuals and non individual clients (trusts, companies, corporations, charitable institutions, legal entities that basically don’t breath or eat): Think stockbroker. If you have a complaint about your stockbroker you go to FINRA. They provide you with a forum in which to resolve claims: arbitration. Arbitration is held at their offices, before a panel of three arbitrators. The process of arbitration for dispute resolution is generally regarded as better than the courtroom and all the formal court proceedings and procedures which make dispute resolution so complex. The process of arbitration works well for those who are prepared and organized and on the right side of the issue. Not every loss is compensable and not every loss is incurred by malfeasance or misfeasance (bad acts). But those that are, that is losses that are the result of some improper act by a “regulated” person can be brought to arbitration. Arbitration is not mediation. Mediation is happy talk and a suggested solution. Arbitration is different. In arbitration the decision is enforceable and final and therefore resolves conflicts.