Terra Extraneus

Associated persons (a/k/a “financial advisors,” stockbrokers, etc.) should be wary of FINRA’s new Rule 13806 which provides for a single arbitrator in promissory note cases. While the single arbitrator may be fine for default cases, where the associated persons plans to make no defense and files no answer, rarely are single arbitrators desirable in contentious employment cases of any kind. Invariably, single arbitrators rarely have the courage on their own to do more than do a Solomon - like “split the baby” Award. Worse, too often, the single arbitrator is so aligned with the industry that even public policies designed to protect ALL employees are simply disregarded. FINRA tried to avoid the latter by restricting single arbitrator choices to panelists qualified to hear discrimination cases. However, anyone caught in this system should be wary until the system statiscally verifies its lack of imbalance in favor of the industry.