July 21, 2006
As an attorney who regularly represents public customers in disputes with broker-dealers, I support arbitrator issued subpoenas for non parties. However, I do not support the provision in 10322(e) that shifts the costs of production of copies of documents received in response to an arbitrator issued subpoena. Most of the non party subpoenas which I have seen in my practice are issued by the Respondent Broker-Dealer. In my experience, copies of the documents subpoenaed are routinely provided to the Claimant without any request for reimbursement of copying costs, just as documents are provided from party to party under the NASD discovery provisions.
Many of my clients feel that the NASD arbitration process is a David vs. Goliath matter anyway. Of course they are correct in most cases because of relative financial strength of the customer vs. the broker-dealer. If 10322(e) is enacted in the proposed form, it will result in a substantial increase of the costs that the public customer clients will have to incur in nearly every arbitration proceeding since the broker-dealer is the party making most non party subpoena requests. There are virtually thousands of documents subpoenaed in many cases by the Respondent broker-dealer. The public customer, who has already been victimized by the registered representative and the broker-dealer, will have the stakes raised by potentially abusive non party document subpoenas. Attorneys for the public customers will always have to request copies of the non party subpoenaed documents or face malpractice issues. These costs will then be passed on to the public customer. Flatly stated, if a party (either Claimant or Respondent) obtains documents from an arbitrator issued non party subpoena, the party who asked for the subpoena should provide copies of those documents to the other party without any reimbursement for costs of production of the copies.