Disqualification Criteria

Criteria for Temporary Disqualification

When the Temporary Disqualification Criteria are met, FINRA will temporarily decline new applicants and will temporarily remove enrolled arbitrators from service.

  • Pending Actions
    Arbitrator is the subject of, or is a party to, a FINRA arbitration; or a pending investment-related civil action or arbitration claim initiated by a customer; or civil action or administrative complaint initiated by a regulatory body; or a civil action or regulatory complaint alleging discrimination or harassment. This provision excludes cases where the arbitrator's conduct in his or her role as an arbitrator is at issue.
  • Subject of Claims or Complaints
    Arbitrator is the subject of, or is a party to, three (3) or more claims or complaints (reportable on Form U-4) within the last ten (10) years regardless of outcome.
  • Filed a Statement of Claim or Complaint
    Arbitrator is a party (excluding representatives and unnamed parties to class actions) that has filed two or more investment-related civil actions or arbitration claims within the last ten (10) years.
  • Final Decisions, Awards
    Arbitrator is the subject of, or is a party to, a final, adverse investment-related court decision or arbitration award of $25,000 or more within the past seven (7) years resulting from a customer-initiated complaint or claim.
  • Director’s Judgment
    The Director of the Office of Dispute Resolution (Director) may temporarily remove an arbitrator, if, in his or her sole judgment, it is determined that the arbitrator is not otherwise properly included in the list of eligible neutrals.

Criteria for Permanent Disqualification

When the Permanent Disqualification Criteria are met, FINRA will permanently decline new applicants, and will permanently remove enrolled arbitrators from service.

  • Misstatement/Omission
    Misstatement or failure to disclose material information.
  • Disciplinary Actions
    Final, adverse disciplinary action, including one levied as a result of a settlement, resulting in a fine, suspension, expulsion, or similar penalty by any domestic or foreign regulatory or governing professional body or regulatory authority on a finding of, including but not limited to, false statement or omissions, material violation of investment-related regulation, or the violation of a non-technical rule1 of such organizations or statute.

    At the discretion of the Director, a final, adverse disciplinary action, including one levied as a result of a settlement, resulting in an admonishment, reprimand, or similar penalty by any domestic or foreign regulatory or governing professional body or regulatory authority on a finding of, including but not limited to, false statement or omissions, material violation of investment-related regulation, or the violation of a non-technical1 rule of such organizations or statute.
  • Fraud
    Final adverse court decisions where there has been a finding of fraud.
  • Decisions, Awards, Involving Discrimination/Harassment
    Arbitrator is the subject of, or is a party to, a final, adverse regulatory decision, arbitration award, or judicial decision involving any discrimination claims, including harassment, in which the arbitrator was found to have engaged in harassment or discrimination.
  • Director’s Judgment
    The Director, upon approval from the National Arbitration & Mediation Committee, may remove an arbitrator if in his or her judgment the arbitrator is not otherwise properly included in the list of eligible neutrals.

1 FINRA “technical violations” are defined in FINRA Rule 9217.