The theme of this year’s Program -- Winning the Hearts and Minds of the Arbitrators -- is premised on the notion that lawyers and lawyering make a difference.¹ In a perfect arbitration world, where the panel objectively searches for the truth and "does justice" that might not be the case. Indeed, most practitioners will confess that they have won (or "prevailed") in some cases they should not have, and lost some they should have won. How could this be so? In our experience as arbitrators and advocates, both "likeability" and "credibility" are important factors, for both the party advocate and the client.
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For the last twenty one years, most individual securities claims brought by investors have been adjudicated in arbitrations before Self Regulatory Organizations. By far the largest dispute resolution forum has been the National Association of Securities Dealers (NASD), which, in 2007, merged its arbitration and enforcement functions with the New York Stock Exchange regulatory authority, NYSE Regulation. The new Financial Industry Regulatory Authority, or "FINRA," is entrusted with regulation of all 5,000 registered member firms and their associated brokers, subject to overall supervision by the Securities and Exhange Commission. The new regulatory authority runs arbitration and mediation programs, registration and licensing of all U.S. broker-dealers, audits, compliance and discipline of member firms and associated representatives.¹ As if the consolidation of two major self regulatory organizations was not enough change for one year, the NASD also promulgated a new Code of Arbitration Procedure, which was approved by the SEC, pursuant to its supervisory power, and became effective for new cases filed after April 15, 2007. The new arbitration code is broken down into three separate portions, governing customer claims (i.e. claims brought by investors against member firms), industry claims (disputes between two or more member firms or a firm and its associated person) and mediation. Notwithstanding the merger of NASD Regulation and NYSE Regulation, and the innaugauration of FINRA, the new Code still bears the name, "NASD Code of Arbitration Procedure for Customer Disputes." This analysis will focus primarily on the new customer code, which can be found at FINRA.org.
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As the fall classic approaches, baseball analogies frequently sneak into the litigator’s lexicon. This one seems apt.¹ Three top securities practitioners, an all-star infield for any team in any league, recently completed treatises that add measurably to the securities arbitration field. Separately, each will be handy on the practitioner’s shelf. Together, there’s not much more one need have for the field.

David E. Robbins’s classic desk-side guide, Securities Arbitration Procedure Manual, aspires to be one-stop shopping for both the experienced and novice securities arbitrator. Most of the two-volume set is arranged like a hornbook, explaining rules, procedures, and important cases in the development of securities arbitration. But unlike a normal academic guide, the text is also interspersed with relevant techniques and tips that a more stodgy text might leave out.
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It has been ten years since the Securities Arbitration Commentator dedicated an entire issue to mediation: Tackling Obstacles to Mediation of Broker/Client Disputes was published in May 1994 and included the Defense Counsel’s Perspective by Ted Krebsbach and the Claimant’s Counsel’s Perspective by Roger Dietz. Both of these seasoned practitioners in securities mediation noted that, although mediation of securities disputes had gained some favor, efforts to increase the use of mediation had met with limited success.¹

Now a decade plus later, does the mediation landscape look much different? We have witnessed the incredible run up of the markets through the spring of 2000, and the tortuous and only in hindsight inevitable decline back to the mean. Claims follow the markets. Thus we are now working through the end of the tech-wreck and correction claims that peaked in 2002 and 2003, and are only recently evidencing a slow down in filings.² Still, there are over 4000 new claims filed each year.
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