SEC consults on reducing role of arbitrator-lawyers

Lawyers and others who seek to act as arbitrators in the US financial sector could see their chances of being appointed severely cut back under proposals being examined by the SEC.

01 July 2014

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The SEC, the Securities and Exchange Commission, is consulting on proposals which would tighten up on eligibility rules for public arbitrators. At the moment, many lawyers, accountants and others with industry experience take on this role. But the Financial Industry Regulatory Authority (FINRA) has sent a proposal to the SEC, the body which oversees FINRA, proposing that anyone who has worked in the securities industry will stop being eligible for these appointments.

Bias

The proposal comes in response to continued pressure from lawyers acting for investors who say that arbitrators who have industry experience might be biased in favour of the sector. Source: Reuters