(Updates with Fienberg's age and role as head of FINRA's disciplinary hearings program.)
WASHINGTON, Sept 3 (Reuters) - The long-time head of the Financial Industry Regulatory Authority's arbitration unit will retire, the Wall Street watchdog said on Wednesday.
Linda Fienberg, who joined FINRA's predecessor organization, the National Association of Securities Dealers, in 1996, will step down from her post at the end of November, according to a statement from FINRA.
A successor has not yet been named, a spokeswoman said.
FINRA oversees the forum in which investors must resolve their legal disputes with brokerage firms. Investors consent to the mandatory arbitration process when they sign agreements to open accounts.
Fienberg, 72, has overseen many changes to FINRA's arbitration process during her 18-year tenure. The system has been marked by controversy since the U.S. Supreme Court narrowly upheld Wall Street's use of mandatory arbitration agreements for its customers in 1987. The agreements became an industry-wide practice following the decision, say lawyers.
Critics of the system had long said it was biased in favor of Wall Street firms. Fienberg took charge at a time when the NASD assigned arbitrators to cases and investors had no input in the selection process, said Philip Aidikoff, a lawyer in Beverly Hills, California, who represents investors.
The process has since been revised to allow investors, brokerages and their lawyers to research possible candidates and rank their preference for arbitrators from lists provided by FINRA.
"I always found her to be a very fair-minded person who I think accomplished a lot and helped move the process more in favor of a level playing field," said Aidikoff, who has practiced in FINRA's arbitration forum for 25 years.
Other changes during Fienberg's tenure include the removal of a mandatory industry-affiliated arbitrator on each three-person arbitration panel. Last year, FINRA ramped up its process for vetting arbitrators after one of them was criminally indicted and suspended from the practice of law but failed to properly disclose those legal run-ins.
The announcement of Fienberg's pending retirement comes as a plan that would restrict industry veterans from acting as arbitrators in many disputes between investors and their brokerages is pending at the U.S. Securities and Exchange Commission.
Fienberg also heads the program through which FINRA conducts hearings involving brokers and Wall Street firms facing discipline by the regulator. (Reporting by Suzanne Barlyn; editing by Chizu Nomiyama, Leslie Adler and Andrew Hay)