Broker-dealer required to arbitrate in connection with dispute between associated person and his customer when the dispute arises from business of broker-dealer MONY Securities v. Bornstein, 2:02-cv-9-FTM-29DNF (M.D. Fla. 2/26/03). Arbitration Agreement * Selling Away * SRO Rules (NASD Rules 2520 & 10101). Broker-dealer is required to arbitrate in connection […]
Arbitration
Securities arbitration refers to the alternative dispute resolution process to resolve claims between broker firms and their customers and employees. FINRA operates the largest arbitration forum in the United States for the resolution of these disputes.
While no one can be forced to give up their rights to a trial in court, virtually all agreements between investors and their stockbrokers include mandatory arbitration agreements, and every registered stockbroker is required to arbitrate their disputes with their customers and firms.
Our site has been providing information regarding securities arbitration since 1995, starting with Overview of the Securities Arbitration Process. We update the site on a regular basis and invite you to explore our commentary and links and to ask questions.
Prefer to talk by phone? Call Mark Astarita at 212-509-6544 with any questions regarding securities law, enforcement and arbitration.
Arbitrators Have Power to Dismiss Claims Before Hearing – Case Briefs
Reed vs. Mutual Service Corp – California – 2003 Reed v. Mutual Service Corp., 2003 Cal. App. LEXIS 395 (Cal. App., 2Dist., 2/21/03). Award Challenge * Confirmation of Award * Exceeding Powers * Arbitrator Bias/Evident Partiality * Timeliness Issues (Eligibility) * Waiver * Arbitrator Authority, Scope of * Res Judicata […]
NASD Defunct Firm Proposal
The Securities and Exchange Commission has invited public comment on a rule proposal from NASD Dispute Resolution that would institute default arbitration procedures for non-responding defunct firms and terminated personnel. When the General Accounting Office disclosed in June 2000 (SAA 00-26) that many winning Claimants in arbitration do not […]
NASD Rule Change on Replacement Arbitrators
NASD Rule Change on REplacement Arbitrators Vacancies to be filled immediately, without a request from the parties. NASD RULE CHANGE ON REPLACEMENT ARBITRATORS Under a Rule proposal filed with the SEC last week, vacancies on Panels will be filled right away, without waiting for the parties to request a replacement […]
Limited Grounds to Compel Non-Signatory to Arbitrate
Limited Grounds Exist for Compelling Non-Signatory to Arbitrate MAG Portfolio Consult, GmBH vs. Merlin Biomed Advisors, LLC, No. 00-9502 (2d Cir., 10/10/01) This is a securities dispute between two former partners in investment advisory firms (the old Merlins) which received management fees from health care investment funds. When Plaintiff relinquished […]
Arbitration Agreements and Enforcement
To Compel Arbitration, Must Prove Knowing Acceptance of the Agreement This time, merely proving that the agreement was signed was not enough. Braga v. VMR Capital Markets, No. B144584 (Cal. App., 2Dist., 2/13/02). Arbitration Agreement * Contractual Issues (Mutual Assent) * Waiver * State Law, Applicability of * FAA (Section2). […]
Attempt to Void Settlement
Arbitration Panel Orders Return of Settlement Payment, and Awards Nothing. WEINBERG v. BEAR STEARNS & CO., INC., NYSE ID #2000-008216 (Los Angeles, 10/18/00): Recently confirmed, this Award presents an unusual outcome in a “two-bites-of-the-apple” scenario. According to the “Case Summary” section of the Award, Israel and Molly Weinberg entered into […]
Damage Control
IN 12 OR SO YEARS OF REPRESENTING securities professionals in arbitrations, I have heard a near-constant refrain from my clients and other members of the financial community: The arbitration process is not fair. The general complaints are that arbitrators are biased in favor of customers, particularly those who are sympathetic; […]
Court Upholds Prehearing Dismissal of Clearing Broker
“Clearing firms are generally not responsible to customers for the actions of an introducing broker” Warren v. Tacher, C.A. No. 3:99-CV-806-R (W.D. Ky., 6/2/00): We mentioned this recent ruling in this well-known arbitration case in last week’s Arbitration Alert (00-26). The Award under challenge in this proceeding constituted the largest […]
Liar, Liar?
Misrepresentation cases in securities arbitration By Mark J. Astarita, Esq. This is one of Mark’s original columns from September 1996 in Research Magazine. It has been updated since then, most recently in June of 2021. The reality is…not much has changed. Misrepresentation claims are one of the most common claims […]
