Tuesday, July 26, 2016

FINRA Reminds Broker-Dealer Firms of Their Duty to Arbitrate | Indisputably

Professor Jill Gross' column on FINRA's position regarding broker-dealers' use of forum selection clauses to avoid FINRA arbitration



Last Friday, FINRA issued Regulatory Notice 16-25 reminding member firms that, under FINRA Rules 12200 and 13200, they have a regulatory duty to arbitrate at the request of a customer (account-related disputes) or an associated person (employment disputes). The Notice cited a number of recent circuit court decisions holding that a forum selection clause in the parties’ agreement superseded FINRA rules.  (In those cases, the broker-dealer was attempting to avoid arbitration at FINRA.)  FINRA disagrees with those holdings, arguing that these courts improperly deemed firms’ duty to arbitrate “contractual” and thus can be superseded or waived.
Read the entire column - FINRA Reminds Broker-Dealer Firms of Their Duty to Arbitrate | Indisputably:
Post a Comment