Law Commons^™

Finra Dispute Resolution Task Force Releases Its Final Report, With Support For Mediation And Live Hearings, Jill I. Gross

Elisabeth Haub School of Law Faculty Publications

This article briefly describes the task force’s formation; highlights its key recommendations (such as requiring mediation before arbitration of all claims—subject to party opt-out, and introducing a more affordable, live hearing option for small claims); analyzes in more detail a few more controversial suggestions (such as expressly banning class action waivers in customer agreements and increasing the use of explained awards), and critiques the task force’s inability to reach consensus on other hot-button issues, such as mandatory arbitration.

The Customer's Nonwaivable Right To Choose Arbitration In The Securities Industry, Jill I. Gross

Elisabeth Haub School of Law Faculty Publications

Arbitration has been the predominant form of dispute resolution in the securities industry since the 1980s. Virtually all brokerage firms include predispute arbitration agreements (PDAAs) in their retail customer contracts, and have successfully fought off challenges to their validity. Additionally, the industry has long mandated that firms submit to arbitration at the demand of a customer, even in the absence of a PDAA.

More recently, however, brokerage firms have been arguing that forum selection clauses in their agreements with sophisticated customers (such as institutional investors and issuers) supersede firms' duty to arbitrate under FINRA Rule 12200. Circuit courts currently are …

Hall Street Blues: The Uncertain Future Of Manifest Disregard, Jill I. Gross

Elisabeth Haub School of Law Faculty Publications

In 2008, in Hall Street Assocs. v. Mattel, Inc., the Supreme Court resolved a then-existing split in the federal circuits and held that parties cannot contractually expand the grounds for judicial review of an arbitration award when invoking the Federal Arbitration Act's vacatur provisions, elevating the finality of arbitration over the parties’ freedom of contract. The Hall Street decision necessarily impacted subsequent jurisprudence regarding parties’ motions to vacate arbitration awards. While the opinion clearly and explicitly barred further contractual expansion of grounds for review, it also avoided and thus left unresolved the issue of whether it would endorse or reject …

Perceptions Of Fairness In Securities Arbitration: An Empirical Study, Jill I. Gross

Elisabeth Haub School of Law Faculty Publications

This Report to the Securities Industry Conference on Arbitration (SICA) documents the results of the authors’ empirical study, through a one-time mailed survey, of survey participants’ perceptions of fairness of securities Self-Regulatory Organization (SRO) arbitrations involving customers. The survey was designed to assess participants’ perceptions of the: (1) fairness of the SRO arbitration process; (2) competence of arbitrators to resolve investors’ disputes with their broker-dealers; (3) fairness of SRO arbitration as compared to their perceptions of fairness in securities litigation in similar disputes; and (4) fairness of the outcome of arbitrations.

When Perception Changes Reality: An Empirical Study Of Investors' Views Of The Fairness Of Securities Arbitration, Jill I. Gross

Elisabeth Haub School of Law Faculty Publications

Arbitration in securities industry-sponsored forums is the primary mechanism to resolve disputes between investors and their brokerage firms. Because it is mandatory, participants debate its fairness, and Congress has introduced legislation to ban pre-dispute arbitration clauses in customer agreements. Missing from the debate has been empirical research of perceptions of fairness by the participants, especially investors. To fill that gap, we mailed 25,000 surveys to participants in recent securities arbitrations involving customers to learn their views of the process. The article first details the survey's background, explains the importance of surveying perceptions of fairness, and describes our methodologies, procedures, and …

The Elusive Balance Between Investor Protection And Wealth Creation, Barbara Black, Jill I. Gross

Elisabeth Haub School of Law Faculty Publications

The Pace Investor Rights Project (PIRP), launched in the fall of 20033 as an expansion of Pace Law School's ground-breaking Securities Arbitration Clinic, seeks to foster increased scholarly interest on topics related to investor justice in the regulatory, arbitral and judicial arenas. The Project thus produced the Investor Rights Symposium, which took place on the grounds of the Judicial Institute at Pace Law School on March 31 and April 1, 2005, to bring together academics, regulators, practitioners, investors' advocates and students to explore the precarious balance between investor protection and wealth creation. The scholarship that follows in this volume reflects …

Economic Suicide: The Collision Of Ethics And Risk In Securities Law, Barbara Black, Jill I. Gross

Elisabeth Haub School of Law Faculty Publications

The first part of this article looks at whether there are any legal principles derived from regulation or the case law to support an “economic suicide” claim. The second part of the article reviews arbitrators' awards to determine whether arbitrators do, in fact, decide favorably on economic suicide claims. The article also looks at some arbitrators' awards that appear to recognize an economic suicide claim to identify any factors that may lead arbitrators to award damages to the claimant. Finally, in the third part, we address whether policy considerations support an extension of recognized brokers' duties to include a duty …