Originally from Alternatives to the High Cost of Litigation

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In the wake of a New Jersey law firm’s investigation into a claim that FINRA agreed to Wells Fargo’s moves in gaming arbitrator selection in a dispute over the bank’s investment services, the industry self-regulatory agency submitted proposed regulations revising arbitrator selection for securities disputes to the U.S. Securities and Exchange Commission.

The comment period on the proposal has closed, and final action by the SEC, which oversees FINRA, is pending.

The 40-page, June 28, 2022, investigative report, by Roseland, N.J., Lowenstein Sandler partner Christopher W. Gerold, concluded there was no agreement between the Financial Industry Regulatory Authority—best known as FINRA, the government-authorized securities industry nonprofit that regulates brokerdealers— and Wells Fargo Clearing Services LLC and its counsel, Terry Weiss, a shareholder in the Atlanta office of Maynard Cooper & Gale. Report of the Independent Review of FINRA’s Dispute Resolution Services–Arbitrator Selection Process, Christopher W. Gerold (June 28, 2022) (available at bit.ly/3l3clXF) (Gerold’s Lowenstein page is available at bit.ly/3L8gxA5).