As part of its mission of serving regular investors, the Investor Advocacy Clinic reviews FINRA rule proposals and submits comments after fully evaluating the proposal. Last week, the clinic commented on FINRA SR-2018-003, a proposal that would provide additional options to investors with smaller claims to have their disputes heard by arbitrators.
The clinic’s comment, drafted by spring 2018 student interns Abigail Howd, Eric Peters, and Dowdy White, praised FINRA for taking steps to provide investors with smaller claims a third option: telephonic hearings. Currently, investors with so-called simplified claims (damages of $50,000 or less) have two choices: either a proceeding entirely on the papers, with no ability to tell their story in person, or a full-blown arbitration proceeding. The proposal adds an intermediate option, and the Investor Advocacy Clinic supports it. The student attorneys also recommended mandatory, in-person training and specialized expertise for arbitrators who oversee the new proceedings. They proposed additional changes, including renaming the overall process to “Small Claims Arbitration” instead of “Simplified Arbitration” because the student attorneys have found that their clients’ claims are anything but simple. Finally, the student attorneys recommended that mandatory discovery be part of the new process. Click here to read the Clinic’s comment letter in its entirety.