January 16, 2013
I appreciate the opportunity to comment on FINRAs proposed changes to the definition of a "public" arbitrator. I am an attorney who concentrates his practice on representing investors in securities arbitration and litigation.
I support this change, which is long overdue. Persons who work for mutual funds or hedge funds should not be defined any differently than a securities broker or investment advisor under FINRA's rules determining whether these arbitrators are "public" or not. Their background and work experience should categorize them in the same manner as any registered representative. FINRA should approve this rule.
However, this proposed rule should go further. The rule currently proposes that these persons should be considered as non-public arbitrators until two years after their affiliation with the mutual fund or hedge fund is over. The proposed rule should go further and should extend this period to at least 5 years (if not longer) after the person's affiliation with the mutual fund or hedge fund is done, much like any registered representative cannot serve as a "public" arbitrator within 5 years of when the representative's affiliation with the firm ends, under current FINRA Rule 12100(p)(1). Moreover, this same 5 year window should be applied to investment advisors as well.
Again, I'd like to thank you for this opportunity to comment on this proposed rule.
Regards,
David Neuman