Subject: File No. SR-FINRA-2013-024
From: Seth E Lipner
Affiliation: Professor of Law, Zicklin School of Business, Baruch College and Member, Deutsch Lipner

July 11, 2013

I write regarding the proposal to amend the FINRA Discovery Guide.

FINRA's attempts to fine-tune the Guide are useful. The current set of amendments ranges from the benign to the beneficial.

The provisions regarding the form of production may be helpful. Electronic documents should certainly not be produced in a form that is manipulated to make them difficult to use.

The provision regarding search affidavits is the most important. In too many cases, a lax approach to discovery is taken. Arbitration lawyers task in-house attorneys, who in turn task paralegals, registered represantives and administrative assistants with the responsibility to gather documents. The further down the chain that process gets, it seems, the lower is the effort expended, and the less reliable the results of the search. Under the current Guide, Claimants are disadvantaged by these low-quality searches, and the attentuated chain-of-responsibility gives arbitration counsel the ability to state that, to his/her knowledge, a diligent search was done, when in fact it was not done. The amendment to the Guide, to require a more-detailed search affidavit, may reduce the incidence of poor-quality searches.