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 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.
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 (NAMC), may remove an arbitrator if, in his or her judgment, the arbitrator is not otherwise properly included in the list of eligible neutrals. The Director’s recommendation is forwarded to the National Arbitration and Mediation Committee (NAMC) Chairperson and the Chairperson of the NAMC’s Neutral Roster Subcommittee who must unanimously approve an arbitrator’s removal from the roster. Upon their approval, the arbitrator is removed from the roster and is no longer available to serve on cases.
Examples of inappropriate behavior that may result in an arbitrator's removal from the roster include, but are not limited to:
- hate speech/violence;2
- failing to be impartial, both in appearance and in fact;
- being rude to parties, counsel or staff;
- demonstrating perceived inability to follow or grasp the issues in dispute;
- being inflexible, especially with regard to mutual requests from parties;
- causing repeated and routine scheduling problems;
- being unprepared for conferences and hearings;
- being unwilling to abide by the Code; and
- violating the Code of Ethics for Arbitrators in Commercial Disputes
1 FINRA “technical violations” are defined in FINRA Rule 9217.
2 FINRA Dispute Resolution Services prohibits any conduct or written or verbal comments by arbitrators that disparages, denigrates or demonstrates hostility or aversion toward any person based upon any classification protected by law. Examples of conduct, which are grounds for removal from the roster, include, but are not limited to:
- hate speech of any kind regarding any protected class, including: race, color, religion, sex (including pregnancy, sexual orientation, or gender identity), national origin, age (40 or older), disability and genetic information (including family medical history);
- sexual harassment; or
- physical violence or threats of physical violence