| June 30
June 30 Wall Street's industry-funded watchdog
has sent a plan to the U.S. Securities and Exchange Commission
that would restrict industry veterans from acting as arbitrators
in many disputes between investors and their brokerages,
according to a filing.
The Financial Industry Regulatory Authority (FINRA) proposal
with the Securities and Exchange Commission would tighten limits
on who is eligible to serve as so-called "public arbitrators," a
class of securities arbitrators outside the industry.
Under the plan, arbitrators who have worked in the
securities industry, even for brief periods, would no longer be
eligible to serve as public arbitrators, according to the
FINRA wants to change its existing definition of who is
eligible to become a public arbitrator because of concerns among
lawyers for investors about the neutrality of public
arbitrators, the regulator wrote in the plan. Lawyers for
investors have long argued that arbitrators who have any
industry ties at all could show bias in favor of the industry.
FINRA proposal is available here: 1.usa.gov/1lscWWO
The SEC, which oversees FINRA, must review and approve
changes to its rules. The agency is collecting letters about the
public's view of the plan.
(Reporting by Suzanne Barlyn; Editing by David Gregorio)