Today, the Columbia Law School Blue Sky Law Blog published a blog posting that I co-authored with Prof. Barbara Black (Cincinatti) with that question as the title.  Click here to read our answer.

FINRA’s Office of Hearing Officers issued its decision today in Dep’t of Enforcement v. Charles Schwab & Co, an enforcement action in which FINRA alleged that Schwab’s class action and joinder waiver language in its customer agreement violated FINRA rules that preserved the judicial class action remedy for investors and empowered arbitrators to consolidate non-class though … Continue reading FINRA Hearing Panel Concludes that FAA Preempts Enforcement of FINRA Rules Barring Class Action Waiver in Broker-Dealer’s Customer Agreement →

The 2010 Dodd-Frank Act empowered the SEC to study the use of mandatory arbitration in the securities industry and consider whether to ban regulated firms from imposing mandatory arbitration on customers.  To date, the SEC has not launched any such study, presumably because Dodd-Frank was loaded with so many regulatory mandates to the SEC that … Continue reading Mass. Securities Regulator Urges SEC to Ban Investment Advisers from Imposing Mandatory Arbitration →

Sean Nolon (Vermont) posted his most recent article on SSRN.  The title is: Second Best Practices?: Addressing Mediation’s Definitional Problems in Environmental Siting Disputes.  The article looks at two environmental case studies where interested parties served mediative functions and explores the implications for the concept of mediator neutrality.  Professor Nolon proposes that this practice has value, but … Continue reading S. Nolon on Mediator Role Confusion in Siting Disputes →

Last week, the Washington State Supreme Court ruled that a mandatory arbitration clause in an insurance contract was unenforceable under state law, and the state law was not preempted by the Federal Arbitration Act because of the McCarran-Ferguson Act.  In State of Wash. v. James River Ins. Co., Civ. No. 87644-4 (WA Sup. Ct. Jan. … Continue reading Washington State Supreme Court Voids Mandatory Arbitration Clause in Insurance Contract →

Thanks to Securities Arbitration Alert 2013-01 from the Securities Arbitration Commentator, I learned that the broker-dealer Charles Schwab has amended the arbitration clause in its customer account agreement to remove one of the provisions that led to disciplinary action against it by FINRA Enforcement.  (See my previous blog posts on the subject, here, here and … Continue reading Schwab Amends its Investor PDAA →

FINRA has filed with the SEC a proposal to change the definition of “public arbitrator” in its Codes of Arbitration Procedure to “exclude persons associated with a mutual fund or hedge fund from serving as public arbitrators and to require individuals to wait for two years after ending certain affiliations before they may be permitted to … Continue reading FINRA Rule Proposal to Amend Definition of “Public Arbitrator” →

Ever since I learned that George Friedman would be retiring at the end of 2012, I struggled to write a fitting tribute to him and his many accomplishments as Director of Arbitration at FINRA for the past fourteen years.  In lieu of continuing my struggle, I reproduce below a wonderful tribute authored by Rick Ryder … Continue reading FINRA Dispute Resolution Director of Arbitration Retires →

Earlier this week, the Supreme Court issued a per curiam opinion in Nitro-Lift Technologies, L.L.C. v. Howard, 2012 WL 5895686 (Nov. 26, 2012), ruling that the FAA preempted a decision by the Supreme Court of Oklahoma to rule on the validity of a covenant not to compete in the first instance, despite the existence of an … Continue reading Supreme Court Decides Yet Another Arbitration Case →