Panel Composition in Auction Rate Arbitration Cases

On August 7, 2008, FINRA announced a new process for resolving auction rate securities-based claims under the Code of Arbitration Procedure. Qualifying claims in which damages claimed are not more than $100,000 involving auction rate securities will be heard by a single public arbitrator. Also pursuant to current FINRA rules, cases in which damages claimed are more than $100,000 involving auction rate securities will be heard by a panel of three arbitrators. FINRA Rule 12403 allows any party to select an all public panel of arbitrators. However, if a non-public arbitrator is appointed to a case, the non-public arbitrator will not be an individual who, since January 1, 2005, has either worked for a firm that sold auction rate securities or themselves sold or supervised someone who sold auction rate securities.

 

FINRA updated its arbitrator biographical information to easily identify arbitrators who, since January 1, 2005, worked for a firm that sold auction rate securities or sold or supervised someone who sold auction rate securities. We are contacting parties in pending auction rate securities cases to inform them of the new process and its impact on their case.

 

Latest Developments on Auction Rate Securities Settlements

 

For information on FINRA's settlements:

 

 

More information on the settlements is available on the SEC's website and the North American Securities Administrators Association's website.

 

Special Arbitration Procedures for Investors Involved in Auction Rate Securities Regulatory Settlements

 

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