Blog Topic

SEC Accepting Comments on Public Arbitration Pilot Program
Posted by: Robert Rex
December 01, 2010

Until December 6th, 2010, the SEC will be accepting comments from the public on FINRA's proposal to permanently give investors the option of having their cases heard by all-public arbitration panels. Until now, FINRA panels have typically been composed of two public arbitrators and one arbitrator that represents the securities industry. This has led some investors to perceive that the system is biased, and in 2008 FINRA began a test program where some cases were heard by all-public arbitration panels.

FINRA has now proposed to make the rule changes set forth in the pilot program permanent for all investors. In our opinion this is a change that is favorable for investors and is one which we support. The SEC will be accepting comments from the public and securities law professionals on the proposed change through their website until Decemeber 6th.

Your input is important. Click Here to leave a comment with the SEC.

Permalink

Large Arbitration Awards Becoming More Common
Posted by: Robert Rex
October 15, 2010

From InvestmentNews:

"Dozens of plaintiffs suing brokerage firms this month and last have seen a veritable gusher of multimillion-dollar awards - leaving some plaintiff's attorneys anticipating a continued stream of such arbitration rulings."

"While a number of attorneys and industry observers say the list of huge awards - the Hagman award was one of the ten biggest in Finra arbitration history - is merely coincidence, others note that the timing of the decisions, two years after the financial collapse of 2008, should be expected."

"And Wall Street and securities firms facing investor lawsuits due to products that imploded will continue to lose, and lose big, attorneys said."

"Mr. Aidkoff said the biggest danger to broker-dealers potentially losing millions in arbitration stems not from rogue brokers but from investment products that soured or imploded during the downturn. "It's just beginning on the product side," he said, noting upcoming cases stemming from broker-dealers selling Medical Capital Holdings notes. "In product cases, the more you sell, the bigger the liability."

It is not suprising to see that arbitration activity is picking up. A lot of investment products that were created at the height of the market were poorly designed and executed. The only problem is that investors are generally not well-informed about their rights in seeking damages from their brokers. Investors need to learn that even though the market crashed, it is not necessarily right for them to have lost inordinate sums of money on their investments. Investors that have even the slightest doubt about the legitimacy of the investments they were involved in should consider contacting a securities lawyer.

 Article from InvestmentNews: No End In Site to Arbitration Bonanza.

Permalink