Earlier this year, I blogged here about the SEC’s staying of a rule change (previously approved by the SEC) to FINRA’s arbitration rules barring non-attorney representatives (NARs) from representing parties in its forum. The Stay Order was an extremely unusual move by the SEC, and certainly raised many questions.

I just became aware [catching up this summer on long overdue reading] of a subsequent related (and also unusual) event: in April 2024, SEC Commissioner Hester Peirce released a “Statement” relevant to the Stay Order, which could be construed as revealing at least, in part, reasons for the Stay. In the Statement, Commissioner Peirce bemoaned the decreasing number of securities arbitration clinics which in prior years had somewhat filled the gap in representation for small claims investors. She then expressed concern that barring NARs via the FINRA rule change would leave investors with even less access to representation, and sought public comment on whether the rule change would impede access to justice. She also raised concern about whether FINRA should step in and further regulate the unauthorized practice of law in its forum, and whether opening new law school clinics could be part of the solution. The SEC then opened a 30-day period (which already expired) for additional public comment on these topics.

Stay tuned for further updates as they occur.