The Financial Industry Regulatory Authority Inc., also known as FINRA, is proposing to tighten its definition of “public” arbitrator. FINRA would like to exclude people associated with a mutual fund or hedge fund from its pool of public arbitrators and require others to wait for two years after ending an industry affiliation before being classified as a public arbitrator, writes Dan Jamieson in an article from the InvestmentNews.com.
On the Securities and Exchange Commission’s website, Finra said the change “would improve investors’ perception about the fairness and neutrality of Finra’s public arbitrator roster.”
FINRA is proposing a two-year cooling-off period for attorneys, accountants and others who have done a certain amount of work for securities industry clients, and for those who work for or serve as officers or directors of entities controlled by securities firms. This two-year wait would cover spouses and immediate family members of such individuals as well.
“In one instance, an individual applying to be a public arbitrator had retired one month earlier from a lengthy career at a law firm that represented securities industry clients,” FINRA said in its filing.
FINRA already has a five-year waiting period for former securities industry employees wishing to serve as public arbitrators, and bans those associated with the industry for at least 20 years from ever becoming public arbitrators.
Many feel Finra needs to go further and eliminate anyone who has had any connection with the industry as an arbitrator.
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, represents clients nationwide before FINRA. If you or a loved one have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: https://www.securitieslawyer.com.