Proposals for Removal of Arbitrators Contemplated
ARBITRATOR REMOVAL: What do you do when an Arbitrator on your Panel has a clear conflict and all routes to remove him/her have proved fruitless? Under the current SRO Rules (e.g., NYSE Rule 610), the Director of Arbitration may remove an arbitrator based on information disclosed to the Director, but only [P]rior to the commencement of the first hearing session. Remember the Decker case (EM 00-10) in which the Panel Chair was challenged by the Claimant, after disclosing a possible conflict, after nine hearing days? The Arbitrator remained on the Panel and the full Panel rejected a motion for his recusal. That is how the problem must be approached today. During the Arbitration Workshop at the SIA Conference, NASD Regulation EVP Linda Fienberg disclosed that a new rule proposal is in the works that will give the Director of Arbitration (and Ms. Fienberg) the non-delegable authority to remove an arbitrator under certain circumstances. When we mentioned this in EM 00-11, we understood it to be a NASD-only rule proposal, but SICA has reportedly agreed to add a similar provision to the Uniform Code of Arbitration. More on this as we get the details of the proposal }
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Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.
He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page - SECLaw.com, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.