Securities Law Prof Blog

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

Tuesday, April 7, 2009

SIFMA Calls Proposed Changes to Arbitration Discovery Guide "Fundamentally Unfair"

On March 6, 2009 the SEC published for public comment FINRA's proposed rule change on  Amendments to the Discovery Guide to Update the Document Production Lists (Release No. 34-59534; File No. SR-FINRA-2008-024).  Comments were due April 3.  A number of comment letters have been filed in response to the proposal.  SIFMA filed a lengthy response asserting that some of the proposed changes were "fundamentally unfair" to brokers:

Our overarching general concern with the proposed amendments is that they go too far in certain areas – for example, in calling for the production to claimants of a broker’s own trading history and the trading history of wholly unrelated customers without any showing of relevance, need, or bearing on the case to justify production of these personal and sensitive records. This is particularly so for claims of excessive trading (List 3), unauthorized trading (List 9), and claims involving particular products or securities (List 12). To the extent the proposals require production of these records without such a showing, they are fundamentally unfair.

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