Expectations have been raised by the media, claimants’ counsel and other pundits that a flood of arbitration filings will follow the conclusion of the $1.4 billion regulatory settlement regarding analyst conflicts.
RESEARCH SETTLEMENT & ARBITRATION IMPACT:
Expectations have been raised by media, Claimants counsel and other pundits that a flood of arbitration filings will follow the conclusion of the $1.4 billion regulatory settlement regarding analyst conflicts.
Acknowledging these predictions in an article appearing in the April 21 Wall Street Letter, NASDs Linda D. Fienberg is quoted as stating that Lawyers for investors are waiting for the settlement to be completed. And theyre waiting to review the documents that will be public once the settlement is concluded. Filings are already up about 24% in the first quarter of 2003, versus 2002s first quarter, and only about 100 of those 2,266 new filings (see SAA 03-15) involve complaints against analysts.
The huge settlement, to which ten major broker-dealers signed on, is the subject of a Joint Press Release issued on Monday (4/28) and has been widely covered in the mass media. The Release appears in full on the SECs WebSite, www.sec.gov/news/press/2003-54.htm.
In addition to the roadmap that the settlement descriptions provide for each broker-dealer and underwriting client, the regulators collected a mass of documentary evidence from the settling firms. These are the documents to which Ms. Fienberg alluded and, to the extent they are probative, arbitration practitioners can be expected to use these materials to formulate and present their cases.
Attached to a Press Release on the New York Attorney Generals WebSite (which is modestly sub-titled Settlements Part of Spitzer-Inspired Global Resolution of Wall Street Investigations,) are Exhibit Volumes relating to the NYAGs investigation of Citigroup, Jack Grubman, and Morgan Stanley (www.oag.state.ny.us/press/2003/apr/apr28a_03.html). The Release itself quotes Mr. Spitzer as saying that evidence uncovered in these investigations is being placed in the public domain to empower individual investors to recover funds that may be owed to them.) (SAC Ref. No. 03-17-01)
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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.