October 10, 2014
For more than 25 years I have been a commercial and financial services lawyer, FINRA/NASD public arbitrator and mediator, and served five years in the NASD arbitrator training cadre in the 1990s. My law practice includes representing FINRA arbitration claimants and respondents in both customer/member cases as well as industry disputes and employment cases. Under the proposed rules, I would likely be classified as an "industry arbitrator", and I would not be able to serve as a public arbitrator until five years after I retire.
I suspect that half of the lawyer arbitrators in the Seattle area from time to time represent claimants or members in customer/member disputes. A good number of those are like me, devoting substantial time to serving all facets of the industry, not just bringing or defending customer claims. It seems to me that not only will FINRA lose 25% or more of its public arbitrators in the short term FINRA will also lose its most experienced and most highly trained public arbitrators/chairpersons for customer/member cases. Not good if you want to encourage knowledgeable fair and impartial resolution of customer cases.
The assumption that lawyers who have worked for one side or the other are biased accordingly can be tested by an analysis of the amount of work the attorney does for either side. The answer to the bias question may be found in more detailed public arbitrator/lawyer disclosures of their past and present securities representation experience, along with percentages of revenue from such work. That way parties and their lawyers in customer member disputes can choose arbitrators with knowledge of the proposed public arbitrators' experience. Those who do not want to disclose more detail should not be public arbitrators.