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Flashcards in Chapter 1.11 Deck (11):

What is not required to be arbitrated?

A claim alleging employment discrimination including sexual harassment. But it may be arbitrated if the parties involved have agreed to arbitrate.


Who is permitted to issue subpoenas for both parties whether for discovery or for appearance at a hearing?

Only Arbitrators


Simplified Arbitration Procedure

May be used if the dispute doesn't exceed $50,000. One single arbitrator will be appointed to resolved the matter.


If claim is more than $50,000 but not more than $100,000.....

1 arbitrator is appointed unless the parties agree in writing to 3 arbitrators


If the claim is more than $100,000 or does not request monetary damages....

3 arbitrators are appointed unless the parties agree in writing to 1 arbitrator.


Arbitration Panel Composition

Customers in arbitration have the option to choose an all-public panel in all cases with 3 arbitrators. The customers include:
-1. Majority-public panel where the public is comprised of a chair-qualified public arbitrator, a public arbitrator, and a non-public arbitrator OR
-2. Optional all public panel which allows any party to select an all-public arbitration panel.


What are parties required to do prior to arbitration?

-Required to exchange any documents that they intend to present in the arbitration hearing at least 20 calendar days prior to the hearing date.


The arbitration and mediation rules provide that:

-Parties may represent themselves
-Parties may be represented by an attorney in good standing admitted to practice in any jurisdiction in the U.S.
-Parties may be represented by a person who is not an attorney(unless they are currently suspended or barred from the securities industry or suspended or barred from the practice of law).

**Promissory note disputes will be resolved by FINRA appointed chair qualified public arbitrators.


Pre-dispute arbitration agreement

When a customer opens a new account, the customer will receive a copy of the pre-dispute arbitration agreement.
-The customer must provide the firm with a signed acknowledgement of receipt of the agreement
-All parties to the agreement agree to arbitrate and waive court claims
-Decisions of arbitrators are final and binding and cannot be appealed
-Upon the request of a customer, member firms are required to provide a copy of the customer's predispute arbitration agreement within 10 business days.


When is a controversy not eligible for submission for arbitration?

If 6 or more years have elapsed from the date of the event.


What can FINRA do if a member firm does not pay an Arbitration panel award that has been ruled against them?

FINRA can impose a fine, suspend the member firm's principals, or suspend the firm.

**Inability to pay has been eliminated as a defense for not paying an arbitration award or settlement.