From: A. Daniel Woska, Esquire
The proposed change to NASD Rule 10326 is warranted.
As an attorney who represents Claimants and has previously represented Broker-Dealers in NASD arbitrations, it has been my experience that from time to time the tapes used to record the proceedings were corrupted and unusable. This has happened often enough that I have actually chosen to use the NYSE as a service provider because they insure that a court reporter is present and therefore, if needed, the transcript of what was said by a witness can be pulled up and used on the spot or the next day.
The NASD recording system is somewhat outmoded and valueless in respect to a proceeding and the need to see what a witness has testified to during a hearing.
By allowing the proceeding to be digitally recorded by the arbitrators this may be helpful if the digitized version of the hearing can be utilized “during” the hearing. It is not unusual for a broker to testify to one thing when called as a witness by Claimant’s counsel and then testify to something completely opposite when questioned by his counsel a day or two later.
Unless the digital recording is easily accessible during the hearing the ability to impeach the witness is hampered if not lost.
Under the revised rule, it appears that both parties as well as the arbitrators may make digital recordings during the hearings. I believe this will enable the attorneys to use their own digitized version of the testimony each evening to determine what a witness has said under oath in order to be able to replay the testimony later in the same hearing to impeach a witness.
Anything is better than the current NASD recording method which provides virtually no reliable value to the proceeding.
A. Daniel Woska, Esquire