The Public Investors Arbitration Bar Association (PIABA) issued a statement finding FINRA’s proposed new rule which would allow for stockbrokers, who are not named as parties in customers’ arbitration complaints, but whose conduct is the subject of investors’ complaints, to seek removal of the investor’s complaint from the stockbroker’s regulatory record potentially harmful to investors.
About the PIABA
PIABA is a voluntary bar association of Attorneys who represent investors in claims against securities Industry members. Since 1990, PIABA has promoted the interests of Investors in all securities and commodities forums. PIABA seeks toInsure the interests of the public investor in securities and Commodities arbitration by protecting public investors from abuses. In the arbitration processes, insuring that arbitration forums are Just and fair to investors striving to create a level playing field. For the investing public in securities arbitrations.
PIABA States FINRA’s Proposed Rule Troublesome
PIABA states that FINRA’s proposed new rule is troublesome for a number of reasons. The procedure will allow an unnamed stockbroker to effectively intervene in an investor’s arbitration case. It will prejudice investors by inserting the expungement issue into the investor’s case before the arbitrators have signed the arbitration award. It will delay the arbitrators’ execution of an award. Finally, it could cause arbitrators to change a ruling in favor of an investor. When the proposed procedure is submitted to the SEC for review, it should be rejected.
While the going trend has been not to name one stockbroker in certain types of securities claim, where the broker-dealer can be held responsible for the conduct of the broker under traditional notions of respondeat superior, or as a control person, under Section 20(a) of the Exchange Act, for a variety of reasons, particularly when the broker has changed allegiances, or the claimant is faced with additional inquisitors likely to prolong the hearing or confuse the arbitration panel, FINRA’s proposed new rule, if effected will likely cause more Claimant’s lawyers to name more stockbrokers personally in arbitration proceedings so as to remove the spectre that following the presentation of a case, upon conclusion, but before rendering an award, the arbitration panel may hear more testimony and be presented with more evidence that the offending broker did absolutely nothing wrong, and therefore, not only should Claimant be awarded a giant zero, the broker is entitled to have the whole event washed away from their public disclosure record
Guiliano Law Group
The practice of Nicholas J. Guiliano, Esq., and The Guiliano Law Group, P.C., is limited to the representation of investors in claims for fraud in connection with the sale of securities, the sale or recommendation of excessively risky or unsuitable securities, breach of fiduciary duty, and the failure to supervise. We accept representation on a contingent fee basis, meaning there is no cost to unless we make a recovery for you, and there is never any charge for a consultation or an evaluation of your claim. If you own the common stock of TradeStation and purchased your shares before April 21, 2011, and wish to learn more about these claims, contact us at (877) SEC-ATTY