December 3, 2010
I am an attorney who regularly represents customers in FINRA arbitrations. I support the proposed rule change (File No. SR-FINRA-2010-053) to the extent it allows customers to choose an all public arbitration panel. I would like to add that FINRA's proposed implementation of the rule could be improved.
If FINRA believes an All Public Panel will "enhance confidence in and increase the perception of fairness in the FINRA arbitration process" then the All Public Panel should be the default choice and the Majority Public Panel should be optional. The proposed rule has this reversed. Customers would be better served if the standard panel composition is an All Public Panel. If a customer did not want the "fairer" composition, they should have to affirmatively choose to have a non-public arbitrator on their panel.
The panel selection process under the proposed rule is also convoluted, so that a customer who elects in writing to proceed with an All Public Panel (Proposed Rule 12403(b)(1)) and who does not want a non-public arbitrator will, nevertheless, be given a list of non-public arbitrators (Proposed Rule 12403(d)(1)(A)) and will have to strike all the non-public arbitrator names (Proposed Rule 12403(d)(3)(a)) to have their choice made effective. It is unnecessary for FINRA to force customers to go through all these steps to get a fairer All Public Panel. If a customer elects in writing to proceed with an All Public Panel they should be give Neutral Lists containing only public arbitrators.
Under the proposed rule, customers are also penalized for selecting an All Public Panel by having their choice of two non-chairperson public arbitrators limited to a list of 10 possible public arbitrators. Customers who choose an All Public Panel (whether by default or by election) would be better served if the parties are given two lists of 10 arbitrators from the FINRA public arbitrator roster and a list of 10 public arbitrators from the FINRA chairperson roster.
My support for an all public arbitration panel should in no way be interpreted as endorsing the present rule requiring mandatory arbitration. Thank you for the opportunity to comment on this proposed rule.