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 consisting of two public arbitrators and one non-public arbitrator. However, the non-public arbitrators in these cases will not be individuals who, since January 1, 2005, have 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:
- News Release: FINRA Announces Agreements with Four Additional Firms to Settle Auction Rate Securities Violations
- News Release: FINRA Announces Agreements in Principle with Five Firms to Settle Auction Rate Securities Violations
- News Release: FINRA Announces Agreements in Principle with Three Additional Firms to Settle Auction Rate Securities Violations
More information on the settlements is available on the SEC's Web site and the North American Securities Administrators Association's Web site.
Special Arbitration Procedures for Investors Involved in Auction Rate Securities Regulatory Settlements
Please visit our Web site often for information on further developments. Visit the Subscriptions page to sign up for automatic notification of Web site updates.
