The FINRA Arbitration Forum for Investors
A recent article on The Street.com concerning revelations about a FINRA arbitrator with a shady past should remind aggrieved investors how important it is hire an attorney who is intimately familiar with the arbitration process. Since nearly all broker-dealers in the US require investors to sign binding arbitration agreements upon opening their investment accounts, investors who believe they have been wronged by stock brokers and/or broker-dealers must bring their claims not through the US Criminal Justice system, but rather through the FINRA arbitration forum.
Digging into the Past of FINRA Arbitrators
According to the Street piece, an arbitrator who had already sat on two previous panels was revealed, through the diligent background checking of the investors’ attorneys, to have been harboring “acts of judicial misconduct” in his past, including allegations of voyeurism. As salacious as these details may be, the important thing to realize is that among the many idiosyncrasies of the FINRA arbitration process, the selection of the arbitration panel is crucial. Before a final arbitration hearing, opposing parties will have the opportunity to review the resumes and statements provided by FINRA of numerous possible arbitrators, of which three are finally chosen. The information FINRA provides, however, can be incomplete or misleading.
As any experienced securities litigation attorney will know, digging deep into the backgrounds of arbitrators before ranking them or accepting them for the panel can make or break your case. Since these panelist will render the final, binding decision in all claims brought by investors, it cannot be overstated how important knowing who they are and how they might decide can be. Glossing the FINRA supplied materials or conducting a cursory Google search will not suffice.