November 29, 2010
I have practiced law for over 25 years. Some of the work that I do involves the securities industry. I do not think that the imposing of a mandatory industry member serves the best interests of justice. It creates a perception of impropriety.
As a former arbitrator myself, I can tell you that it is more that just the perception. The industry arbitrator identifies with the respondent Broker quite naturally. That is not right because cases should be determined on the evidence.
The industry arbitrator may be thinking in the back of their minds that there, but for the grace of God, go I. That is the inherent bias in the system. The cases must be decided on the evidence with a reasonable weighing in an objective way, not giving the charged member of the industry the benefit of the doubt. It is in the close cases that due process is tested and having such a tilt towards the industry is just not appropriate.
It is not feasible for the attorneys representing the members of the public to exhaustively examine the industry arbitrator about every client or product that the industry panelist has sold to see if there may be an issue. The removal of the arbitrator once appointed is very problematic indeed. Since there is no way to examine the arbitrators prior to ranking, it becomes impossible to really know what the investing public seeking redress for improper actions by the industry may face. This is especially the case when the industry panelist becomes a mini expert in the deliberation room.
Please approve this change immediately and make it effective for all cases before FINRA in which a panel has not yet been selected.
Jeffrey P. Coleman
Attorney at Law
Davidson College, 1981
William and Mary Law School, 1985
AV/ Preeminent Lawyer Martindale Hubbell