Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Friday, October 19, 2007

FINRA's Proposal on Dispositive Motions a Hot Topic

One of the hot topics at this year's Public Investors Arbitration Bar Association (PIABA) Annual Meeting is FINRA's proposed rule that is intended to reduce the number of pre-hearing motions to dismiss.  Although FINRA has not yet filed the text of the rule with the SEC, it took the unusual step of issuing a Notice to Parties describing the proposed rule, as well as sending an e-mail blast to its arbitrators immediately after the FINRA Board approved the proposal.  George Friedman, Executive Vice President, made it clear that this proposed rule was in response to complaints from claimants' attorneys that too many pre-hearing dispositive motions were being filed in arbitration.  The proposed rule will restrict pre-hearing motions to dismiss to three ground -- prior written settlement, "factual impossibility," and the 6-year eligibility rule and require a panel that grants a dispositive motion to give an explanation.  Of course, as with the expungement procedure, much will depend upon the competence and commitment of the arbitrators to understand and follow the procedures.

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