FINRA filed a proposal with the SEC on October 25, 2010 that would change the rules in regards to investors filing arbitrations against brokers or brokerage firms in FINRA’s Dispute Resolution forum. These new rules, which were just approved by the SEC, allow investors the option of selecting an all public arbitrator panel. Previously, the FINRA Code of Arbitration Procedure for Customer Disputes required an industry-affiliated arbitrator in all claims exceeding $100,000 or more in damages—sometimes referred to as “three-arbitrator panel customer disputes.”Industry experts theorize that the fast-track approval of these new arbitration rules, which were accomplished in only three months, reflects pressures generated in part by the SICA Fairness Study. The mandate issued by the Dodd-Frank Act required the SEC to conduct a review of securities arbitration. Results from this study indicate that most investors perceived FINRA arbitrators to be biased.The use of pre-dispute arbitration clauses in customer agreements has become relatively standard practice for most broker-dealers. Due to this fact, FINRA could no longer justify insistence on an industry-affiliated arbitrator on all disputes for claims exceeding $100,000. Meyer Wilson represents clients who have been harmed by investment fraud. For more information, contact Meyer Wilson by calling toll free or filling out our online form.