July 28, 2014
Via Email ( rule-comments@sec.gov )
Dear SEC Commissioners,
I am an experienced FINRA arbitrator who has served for more than two decades, both as a “public” and as a “non-public” arbitrator. Although I worked for a few years in the securities industry, decades ago, I never worked in “sales” of any financial product. I am moved to write in opposition to the recent proposal (SR-FINRA-028) to change FINRA Rules 12100 and 13100 to forever label all persons who have ever done any work in the securities industry (even if they were not “salespeople”, but clerks, or counsel, or accountants or janitors) as “non-public” arbitrators, as if they had some taint that they can never live down. (FINRA rules facially diminish the role of non-public arbitrators, relegating them in several respects to lesser roles as arbitrators.) In today’s society, we do not even legally “discriminate” against convicted felons to such a lifelong presumption of taint – quite the opposite.
It is “simplistic” enough to brand all former industry workers as non-public no matter what their job was, nor how brief their industry employment, nor how very long ago it may have been. But this is especially egregious when the broad tar brush is wielded by a government agency that routinely is expected to, and does, make the most sophisticated, complex and nuanced distinctions. Yet even granting such a flawed premise for argument’s sake, it is strikingly unfair that the proposal does not treat persons who worked for claimants in equal fashion, instead offering to re-classify them as public arbitrators after a “cooling off” period.
There is no principled basis to classify these types of arbitrators differently. Ensuring the fairness of FINRA arbitrations, all arbitrators, even those who once worked in industry, already swear an Oath to avoid not only impartiality, but even the appearance of partiality. If the SEC elects to discriminate against ex-industry workers compared with ex-claimants’ lawyers, not only will it be acting in a way that is in fact self-evidently partial (rather than impartial) but in a way that manifestly gives the appearance of great partiality as well. I hope, if you do not reject this proposed rule change altogether, that whatever “cooling off” period you offer to former claimants’ representatives and the like, you reject any double standard and offer an equal post-employment “cooling off” period to ex-industry workers.
Sincerely,
Robert Getman