March 31, 2009
Since 1991, a substantial part of my law practice has consisted of representing brokerage firm customers in NASD/FINRA arbitration. During this time, Ive seen a steady, persistent erosion of customers' rights, and correspondingly their success, in the arbitration process. The proposed revision to the Discovery Guide represents a further, substantial erosion of those rights, by improperly requiring the customer to produce, defend, and distinguish investments, ownership interests, employment, and other activities that took place years before the transactions at issue in the arbitration.
The Discovery Guide revision places a grossly disproportionate burden upon the customer to affirmatively produce many years of personal financial information, much of which should be wholly irrelevant. The customer is also required to provide written affirmations and authorizations that are not required of the brokerage firm or broker. While the customer is required to provide reams of immaterial financial information, the Discovery Guide allows brokerage firms and their agents to continue to withhold vital documents, including full commission runs and tape recordings.
While there are many improvements in the proposal with respect to brokerage firm document production, the proposal only serves to further tilt the playing field in favor of the firms and brokers, and against their customers. The proposal perpetuates, and enhances, the unfairness in the discovery and hearing process for customers. If the brokerage firms are to be presumptively entitled to such unfettered, breathtakingly broad discovery with respect to customers, then the customers (who are, keep in mind, the victims) should have equal, presumptive access to all vital discovery for proof of their claims. That is not the case with the Discovery Guide proposal, and if it cannot be revised to level the discovery playing field, then it should be rejected. Thank you for your consideration.