New York Securities Lawyer Blog
Recently, on Friday, January 11, 2013, the Financial Industry Regulatory Authority, Inc. (“FINRA”) posted Release No. 34-68632 on the Securities and Exchange Commission (“SEC”) website which was the Notice of Filing of Proposed Rule Change Relating to Amendments to the Customer and Industry Codes of Arbitration Procedure to Revise the Public Arbitrator Definition (“Notice”). In its Notice, FINRA proposed the revised definition of “public arbitrator” to exclude “persons associated with a mutual fund or hedge fund from serving as public arbitrators and require individuals to wait for two years after ending certain affiliations before they may be permitted to serve as public arbitrators.” Further, the rule change would require attorneys, accountants and other securities industry professionals, as well as spouses and immediate family members of such individuals, to wait two years after leaving the industry before being able to serve as a public arbitrator. Currently, FINRA has imposed a five-year waiting period upon industry employees from serving as public arbitrators, and has banned any securities industry employee with over 20 years of industry experience from ever serving as a public arbitrator. FINRA believes the definition “would improve investors’ perception about the fairness and neutrality of FINRA’s public arbitrator roster.”
Lax & Neville LLP has nationally represented registered investment advisory firms, as well as securities industry employees, financial services professionals and securities industry companies in regulatory matters and securities-related and commercial litigation. Please contact our team of attorneys for a consultation at (212) 696-1999.