BNA has reported that FINRA has implemented a new policy and will now conduct annual background checks as well as an additional review of arbitrators before appointing them to new cases.  This change in policy was prompted by FINRA’s discovery last year that one of its arbitrators had been indicted for the uanuthorized practice of law.

It’s too bad that the forum needs to implement measures such as these to make sure the parties have neutral and ethical arbitrators; the arbitrator’s disclosure obligations should have taken care of this without the need for a case-by-case background check.