2024- No. 2024-03

RECENT NEWS FROM THE ARBITRATION FRONT

Contributor: George H. Friedman (George@SecArbAlert.com)

(ed: This column follows recent items of interest to securities experts and relating to arbitration practice. These items are drawn from recent editions of the Securities Arbitration Alert (updated where necessary) and appear here with the permission of the Alert’s publisher. This issue’s column is compiled by the SAA’s publisher and Editor-in-Chief, George H. Friedman. Note that all 2021-2024 back issues of the Alert can be downloaded free of charge here.)

NY CITY BAR ISSUES REPORT ON MEDIATION CONFIDENTIALTY. A New York City Bar Association subcommittee in June released a report exploring confidentiality in mediation. Mediation Confidentiality in New York State: Overview of the Current Regulatory and Institutional Landscape with Recommendations, was written because: “Unlike a number of other states, New York has not adopted a statewide legal framework governing the confidentiality of information and documents shared during a mediation or legislated a specific ‘mediation privilege.’  READ MORE

PROJECT 2025: ABOLISH FINRA OR AT LEAST MODIFY ARBITRATION PROGRAM. The Heritage Foundation’s “Project 2025” report recommends that FINRA be abolished and merged into the SEC. Failing that, the conservative thinktank urges major changes to the Authority’s arbitration program.  READ MORE

EXPERT OPINIONS: WHAT ARE THE COURTS (AND ARBITRATORS) THINKING?

Contributor: George H. Friedman (George@SecArbAlert.com)

(ed: By reading how courts and arbitrators value, view and utilize testifying experts or decide issues experts encounter on a regular basis, one can better serve the factfinder, more effectively help the client, and more likely avoid a bad experience. For selected court decisions, we draw again from the Securities Arbitration Alert (SAA), and other resources. Note that all 2021-2024 back issues of the Alert can be downloaded free of charge here.)

Friedler v. Stifel, Nicolaus, & Company, Inc., No. 22-1895 (4th Cir. Jul. 18, 2024): “Petitioners seek to vacate an arbitration award entered against them arising out of a dispute over the management of their brokerage accounts. They claim that the arbitrators manifestly disregarded the law in resolving the dispute. The district court denied the petition, finding that it didn’t meet this difficult standard. READ MORE 

TWO FEDERAL DISTRICT COURTS STAY NEW DOL FIDUCIARY RULE. Federation of Americans for Consumer Choice, Inc. v. Department of Labor, No. 6:24-cv-00163 (E.D. Tex. May 2, 2024) and American Council of Life Insurers v. DOL, No. 4:24-cv-00482-O (N.D. Tex. Jul 26, 2024). The beleaguered DOL fiduciary rule suffered a new round of challenges, as two federal courts recently issued orders staying the rule’s implementation. READ MORE 

HEARD THROUGH THE REGULATORY GRAPEVINE, COMMENT LETTERS, SPEECHES & OTHER ITEMS OF INTEREST

(ed: Keeping abreast of rulemaking and regulatory initiatives can be a full-time job. This compilation is a summary of regulatory actions and comments and is not meant to be an all-inclusive substitute for individual research via the various regulatory sites.)

Contributor: Hollie Mason (Hollie.Mason@kroll.com)

SEC ENFORCEMENT On September 9, 2024, the SEC settled several enforcement actions concerning company provisions in various kinds of agreements with employees, including employment, separation, and settlement agreements that allegedly violated the SEC's whistleblower rules.

https://www.sec.gov/newsroom/press-releases/2024-118

Contributor: David MacNair (macnairconsultingllc@hotmail.com)

AFCE Report The Association of Certified Fraud Examiners released the 13th edition of their "Occupational Fraud 2024: A Report to The Nations." ACCESS REPORT HERE

10 THINGS AN ARBITRATOR HATES ABOUT ARIBITRATION (With Apologies to William Shakespeare), JDSupra (Jul. 2, 2024): “You may recall Shakespeare’s line from Henry VI, Part 2, Act IV, Scene 2, spoken by the noted legal scholar, Dick the Butcher, ‘the first thing we do, let’s kill all the lawyers.’ If we’re talking about fixing arbitration, however, lawyers aren’t the problem. They’re the solution — if they keep a few things in mind. So, to take another page from the Great Bard, here are the 10 things an arbitrator hates about arbitration, starting with number 1.” READ MORE

MEMBER ACHIEVEMENTS - BRINGING CREDIT TO THE PROFESSION

Contributors: Patti Koetting (pkoetting@gmail.com) (ed: Whether it’s writing an article, hosting an event, joining a professional committee, or just pursuing a smart practice, we report on member's efforts here. Look to the “Newsroom” section of the SER Website for more frequent, timely reports on our members.)

SER former Directors Jack Herrmann and Ross Tulman were presented the honor of Director Emeritus, a special designation bestowed by the Board of Directors, at this year's Annual Member Meeting on July 26th in Washington, D.C. READ MORE

MEET OUR NEWEST MEMBERS! (Click on a name to view the full profile on SER's website, where you can also access their contact info and website. Better yet, reach out and connect to find out more about them.

Mike Evans has 30 years experience in the financial industry. Beginning as a regulator for the American Stock Exchange, he has worked in equities derivatives and trading compliance at Goldman Sachs and Lehman Brothers, moving to BNP Paribas in New York where he ultimately served as Global Head of Financial Markets Compliance in Paris and London. He has also been a contributor to Fordham Law's Compliance degree programs and is an approved FINRA Arbitrator.

PRACTICE MANAGEMENT TIPS!

Contributors: Rotating Veteran SER Members (ed: Helpful tips from seasoned experts relating to operating a successful expert practice.)

Retainer Agreements

by SER Member Ross Tulman (rpt@tiagroup.com)

For many of us, most of our cases have been heard at FINRA. When retained by a FINRA member firm, we can use a FINRA dispute resolution provision in the retainer agreement to guarantee payment. This enables us to enforce fee agreements with member firms in the FINRA dispute resolution forum. FINRA imposes a stiff remedy on firms that refuse or cannot pay awards issued by the panel – termination of registration.

The case load is shifting away from FINRA as the business model of choice is moving to the investment advisor platform. Because many investment advisors are not associated with FINRA member firms, we can no longer take advantage of FINRA “protection” to ensure payment in these matters. You should review the dispute resolution provision in your contract to make sure it still fits. The paragraph below is what we now use in non-FINRA eligible matters:

“Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Consumer Arbitration Rules. Judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Any dispute involving less than $25,000 shall be resolved by the submission of documents. The award of the arbitrator(s) will include all fees and costs associated with the proceeding as well as fees and costs related to any proceeding or process necessary to confirm and collect the award issued by the arbitrator(s).” 

SER ACTIVITIES-WHAT'S CIRCLING AT THE ROUNDTABLE?

Contributors: Patti Koetting (pkoetting@gmail.com) (ed: SER’s Committees are composed of two Board Members, and most have one or more members at large. Our Committees are listed under the “About Us” button on our Home Page.)

2024 Annual Membership Meeting & Conference

The 2024 Conference had the highest attendance since 2018! Speakers included guests Rick Berry and Victoria Crane from FINRA, Jennifer Rego and Jeffrey Zaino from AAA, attorneys Peter Buckley, Christine Lazarro, Jenice Malecki and Lucian Pera, as well as new and veteran SER members. See the recap below where you can read more on the sessions, including the full agenda and bios.

Retiring Directors

Alan Besnoff and GG Genco Dube were honored on July 26th at this year's Annual Member Meeting in Washington, D.C. Outgoing President Bob Graham presented each retiring Director with a plaque commemorating their years on the Board. READ MORE

2024 Election of Directors and President-Elect

Paul Carroll (Past Director), Colleen Diles, Hollie Mason (serving a second term), and Robert Oram were added to the Board of Directors at the conclusion of the Annual Member Meeting. Patrick M. Dennis was elected as President-Elect. READ MORE

Thank you to this year's Platinum, Gold & Silver Sponsors!

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STATISTICS, EVENTS & RESOURCES

Contributor: Patti Koetting (pkoetting@gmail.com) (ed: This column seeks to apprise members of events, products and services that can be useful to them in their professional activities. Unless specifically stated, SER does not endorse or sponsor any of the products and services mentioned herein.)

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