December 3, 2010
I am an attorney who represents investors in FINRA arbitrations. I support the proposed change to FINRA arbitration rules providing for arbitration panels consisting of three public arbitrators rather than two public arbitrators and one industry arbitrator. While many industry arbitrators are fine arbitrators, they are overall oriented toward the industry. As such, the arbitrator selection process is biased in favor of the industry. Saying that one-third of a securities arbitration tribunal should be securities industry representatives is like saying that, in an insurance defense court case, one-third of the jury should be insurance industry representatives, rather than a fair cross-section of the community. This result makes no sense and detracts from the fairness and appearance of fairness that are necessary for a properly structured arbitration process.
The Commission should approve the rule change on an expedited basis.