By Kevin Warger
Though seen by many as the speedy and efficient dispute forum, timely resolution of FINRA arbitration claims can be a life or death matter for some. When senior or ill claimants have lost large sums of money due to misconduct by their brokers, they can be left destitute and in dire need of a reward to help pay for medical bills. Where urgent health matters require immediate attention, the need to reach an investment dispute resolution becomes great, and lengthy deadlines could become very costly. The length of these deadlines, however, has been under review in recent years and may be undergoing some drastic changes. In recent weeks, FINRA Office of Dispute Resolution director Richard Berry stated that his office is currently preparing a draft rule to expedite the process for those over the age of 75. Under this rule, the deadlines for procedures like selecting arbitrators, preparing an answer, and producing discovery documents would be significantly shortened.
The idea is not a new one: In 2004, FINRA implemented an expedited arbitration process, still in effect, for those with serious illness or that are 65 years or older. That process, however, is an option rather than a requirement and has not been as widely used as anticipated. The 2004 process only applies to the way that FINRA facilitates arbitration proceedings—it does not require the parties themselves to move things along more quickly. Almost 10 years ago, a supervising attorney for the Investor Justice Clinic at the University of San Francisco said that the time to arbitrate a FINRA case takes 1.25 years, and that those who chose the shorter route per the 2004 option resolved their cases 31 percent sooner. However, sick and elderly claimants seeking investment remedies are often unsophisticated laypeople and simply would not know about the expedited option. The new rule, on the other hand, would trigger the expedited process automatically.
Though this new proposal isn’t the only measure meant to protect senior investors (for example, FINRA Rule 2165 attempts to curtail the exploitation of elderly or incapacitated investors), it is a step toward resolving some of the disputes common to the intersection of old age and financial investment.