{"id":1112,"date":"2012-08-23T14:18:16","date_gmt":"2012-08-23T14:18:16","guid":{"rendered":"https:\/\/www.stockbrokerfraudblog.com\/2012\/08\/finra_seeking_to_create_a_bigg"},"modified":"2022-03-09T16:21:46","modified_gmt":"2022-03-09T22:21:46","slug":"finra-seeking-to-create-a-bigg","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/finra-seeking-to-create-a-bigg\/","title":{"rendered":"FINRA Seeking to Create a Bigger, More Diverse Arbitrator Roster"},"content":{"rendered":"<p>\t\t\t\tAccording to the Financial Industry Regulatory Authority &#8216;s lead arbitrator recruiter, the self-regulatory organization is taking active steps to create a roster of arbitrators that is not only larger than its current one, but also more professionally and culturally diverse. Barbara Brady spoke at a Practicing Law Institute seminar this month. <\/p>\n<p>Arbitrators are who that preside over <a href=\"https:\/\/www.investorlawyers.com\/finra-arbitration-faqs.html\">FINRA arbitration<\/a> cases on numerous matters, including financial fraud claims by investors and broker-brokerage firm disputes. Last year, arbitrators made more than 1,270 securities arbitration decisions that led to over $19 million in repayment to investors, over $63 million in fines, and 475 broker suspensions. Only a court can overturn an arbitrator&#8217;s securities ruling and this would have to be due to extenuating circumstances.<\/p>\n<p>&#8220;Outcomes in arbitration vary greatly based on the quality of the arbitrators,&#8221; said <a href=\"https:\/\/www.investorlawyers.com\/william-s-shepherd.html\">William Shepherd, a Houston-based attorney<\/a>, whose firm has represented investors in more than 1,000 arbitration claims over the past twenty years. &#8220;If securities arbitration is to have any integrity at all FINRA must make certain that the arbitrator decides cases fairly.&#8221;<\/p>\n<p>Choosing who should be named an arbitrator can lead to disagreement over how much securities industry\/brokerage firm experience or ties a candidate should have. For example, while an arbitrator who used to be a broker or a securities attorney may have certain technical expertise and experience that could prove helpful in deciding a case, he\/she may also be biased. <\/p>\n<p>&#8220;Having savvy arbitrators may streamline the process a bit with less reliance on expert testimony,&#8221; said Shepherd, &#8220;but it is difficult for such arbitrators to understand the lack of understanding of investments by the ordinary investor. I often point to my client&#8217;s own experiences to demonstrate this to arbitrators.  For example, my client&#8217;s understanding of machinery at his workplace keeps him from getting hurt, but if you walked into that factory you might be killed the first day.  It&#8217;s not that you&#8217;re stupid, just that you lack experience in that environment.  The dangers of investing were foreign to my client.  That is why he or she hired an expert. &#8221;<\/p>\n<p>Securities panels with three arbitrators usually handle arbitration disputes when over $100,000 is involved. Customers are allowed to opt for two of the three arbitrators or all three of them to not have a securities industry background. That said, just because someone is a non-industry arbitrator doesn&#8217;t mean he\/she lacks biases. <\/p>\n<p>While FINRA chooses not to reveal the demographics of its arbitrator pool, Brady claims that the SRO does try to select a diverse range of arbitrators from different backgrounds. She said FINRA is making an effort to make sure that women, minorities, and professors of economics, law, and real estate are represented.<\/p>\n<p>Who makes a good arbitrator?, Reuters, August 20, 2012 <\/p>\n<p>Arbitrator Appointment Frequently Asked Questions, FINRA <\/p>\n<p><strong><br \/>\nMore Blog Posts:<\/strong><br \/>\n<a href=\"https:\/\/www.investorlawyers.com\/blog\/2012\/06\/morgan_stanley_smith_barney_or\">Morgan Stanley Smith Barney Ordered by FINRA Arbitration Panel to Pay $5M Over Allegedly False Promises Made To Brokers Recruited from UBS AG<\/a>, Stockbroker Fraud Blog, June 22, 2012<br \/>\n<a href=\"https:\/\/www.investorlawyers.com\/blog\/2012\/05\/apple_reit_arbitration_finra_r_1\">Apple REIT Arbitration: FINRA Rules Against David Lerner Associates in First of Hundreds of Cases<\/a>, Stockbroker Fraud Blog, May 26, 2012 <\/p>\n<p>UBS, Citigroup FINRA Arbitration with Nonprofit Over ARS Cannot Be Halted, Said District Court, Institutional Investor Securities Blog, August 6, 2012  <a href=\"https:\/\/www.investorlawyers.com\/blog\/finra-seeking-to-create-a-bigg\/#more-1112\" class=\"more-link\">Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>According to the Financial Industry Regulatory Authority &#8216;s lead arbitrator recruiter, the self-regulatory organization is taking active steps to create a roster of arbitrators that is not only larger than its current one, but also more professionally and culturally diverse. Barbara Brady spoke at a Practicing Law Institute seminar this month. Arbitrators are who that [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3798,3739],"tags":[],"class_list":["post-1112","post","type-post","status-publish","format-standard","hentry","category-arbitration","category-finra"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>FINRA Seeking to Create a Bigger, More Diverse Arbitrator Roster &#8212; Investor Lawyers Blog &#8212; August 23, 2012<\/title>\n<meta name=\"description\" content=\"According to the Financial Industry Regulatory Authority &#039;s lead arbitrator recruiter, the self-regulatory organization is taking active steps to create a &#8212; August 23, 2012\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/finra-seeking-to-create-a-bigg\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"FINRA Seeking to Create a Bigger, More Diverse Arbitrator Roster &#8212; 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