November 30, 2010
To Whom It May Concern:
I have been representing victims of fraud and negligence for over 5 years. I have also tried 25 cases to jury verdict in non-securities cases. I write in support of the proposal to give the claimant an option to decide whether or not he wants an industry arbitrator on the panel.
It is untrue that all industry arbitrators are unfair and lean towards to securities industry. In fact, on many cases, having an industry person is good because he/she can teach the other arbitrators about the securities industry in context with a given case. Just as important is the appearance of fairness and openness.
If a claimant loses a case, he should at least be able to say that the process was fair. If he is bound to accept an industry arbitrator on a panel, there is far less likelihood that he would perceive the process as being "fair". This is why having an "option" is of such great value to both FINRA and the SEC - the APPEARANCE of fairness.
Having a mandatory industry arbitrator is akin to having 4 doctors on a 12 member jury decide a medical malpractice case. While the Plaintiff may lose on the merits (and perhaps SHOULD lose on the merits), the APPEARANCE of bias will be forever implanted on the Plaintiff's perception of the process.
I write in support of the proposal to make an industry arbitrator a choice, rather than the mandatory nature of past panels. If nothing else, FINRA and the SEC will always know that they did everything in their power to promote openness and fairness.
Assuming these are commonly shared virtues, I know that the SEC will do the right thing in this regard.
Len Haberman, Esq.
Boca Raton, FL