August 30, 2010
If mandatory arbitration is removed, then many customer claimants who would have been able to sue under arbitration, would not be able to afford a court case, and the time it would take to come to and end could be years. Additionally, in court the big-bad brokers could paper the claimant into submission.
If i am not mistaken, the statistics do not show that the arbitration panels are more in favor of industry or customers, it is about 50-50 historically.
As an industry arbitrator, I can tell you that I do not favor brokers, I favor facts. If a broker is shown to be a bad guy, I want him out fo the industry, I do not need another blackeye for the industry.
I would however agree that the arbitrator pool could use some cleaning up and more requirements so that there is at least more consistency among arbitrators.
I also disagree with the all public panels. FINRA, in its efforts to show the world that it is fair and concerned about customers is stacking the deck against brokers.