Securities Law Blog

FINRA has published the first 2008 issue of its arbitrator newsletter, The Neutral Corner. As always, it contains a number of interesting articles for the broker/dealer practitioner. One is these; entitled "Arbitrability of Sarbanes-Oxley Whistleblower Claims" is the first article that I know of addressing this important topic. The authors rightfully center their discussion on whether SOX whistleblower claims are "employment discrimination" claims, and thus exempt from mandatory arbitration under Rule 13201 of the Code of Arbitration Procedure for Industry Disputes. After examining the issue at some length, the authors conclude that SOX claims are not "employment discrimination" claims-in part relying on two arbitration panel decisions on the subject. As a result, the SOX whistleblower claims could be heard in arbitration and not court. Another important part of this edition of Neutral Corner reviews deferred variable annuities and directs arbitrators to FINRA Regulatory Notice 07-53. In so doing, the Neutral Corner points out that arbitrators "when in doubt about an issue, legal or otherwise, should request briefs from the parties", citing The Arbitrator’s Manual. Lastly, there is a terrific discussion of the use of electronic discovery in arbitration, and how the Federal Rules of Civil Procedure deal with the issue, and what lessons can be applied to arbitrations. The full is issue of Neutral Corner is available here.

For more information on this subject contact securities attorneys, Michaels, Ward & Rabinovitz, LLP.