December 12, 2007
NASAA Testifies in Support of Arbitration Fairness Act
Tanya Solov, Director of the Illinois Securities Department, testified on behalf of NASAA in support of the Arbitration Fairness Act of 2007 introduced by Sen. Russ Feingold, saying that it is “a positive step in the right direction” toward improving the fairness of the system of securities arbitration.
“NASAA believes that securities arbitration system should be truly voluntary, that more meaningful and accurate statistics concerning arbitration outcomes should be compiled and disseminated, and the balance in the composition of arbitration panels should be restored,” Solov testified.
Solov said FINRA should require its member firms to offer their customers a meaningful choice between binding arbitration and civil litigation. “If arbitration really is fair, inexpensive, and quick, as its adherents claim, then these benefits will prompt investors to choose arbitration,” Solov testified. “If, on the other hand, arbitration does not offer these advantages, then this mode of dispute resolution should not be forced upon the investing public.”
NASAA also suggested changes to the current securities arbitration system:
Removing mandatory industry arbitrators from the arbitration process, and for public arbitrators to have no ties to the industry.
Improving the statistics that FINRA collects and disseminates on arbitration, particularly with respect to outcomes. Currently, FINRA statistics treat any award of damages to a customer as a "win," even if the amount is a small percentage of what was asked for.
TrackBack URL for this entry:
Listed below are links to weblogs that reference NASAA Testifies in Support of Arbitration Fairness Act: