Investor Advocacy Clinic Comments on FINRA Discovery Rule Change Concerning Firm Insurance Information

The Investor Advocacy Clinic continues to give all investors a voice. On September 24, 2018, the clinic commented on FINRA Regulatory Notice 18-22, a proposal that would amend the Discovery Guide’s Firm/Associated Persons Document Production List to require brokers and firms to produce documents concerning third-party insurance coverage upon request.

The clinic’s comment, authored by student attorneys Lynn Mckeel , Ben Dell’Orto , Edward Greenblat , Matthew Haan, Kevin Mathis, Brook Ptacek, and W. Dowdy White, support FINRA’s efforts to allow investors to evaluate whether they should go forward with a claim if there is little chance of discovery. Nevertheless, the clinic urged FINRA to take their proposal a step further and adopt the automatic mandatory disclosure of third-party insurance coverage regardless of any formal written request. Georgia permits any litigant to receive insurance information, upon request, before a suit is even filed.  Moreover, federal and many state courts mandate disclosure of insurance information without a formal request.   Requiring firms to produce insurance information early in an arbitration proceeding helps claimants evaluate whether they are throwing good money after bad.  The clinic’s comment is available in full here.