Briefly Noted

Broker Arbitration Rule Change

Investors will soon be able to choose an all-public panel for arbitration cases against brokers. The Securities and Exchange Commission (SEC) approved a recommendation by the Financial Industry Regulatory Authority (FINRA) to give individual investors more choice over arbitrators. The changes are being made in response to criticisms that the existing process for selecting an arbitration panel favors brokerage firms over individual investors.

An investor who files a claim for more than $100,000, for an unspecified amount or for non-monetary damages will have his case heard by a three-person arbitration panel. A claim between $25,000 and $100,000 can also be heard by a three-person panel—instead of a single arbitrator—if both parties agree.

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