In a Regulatory Notice published recently, FINRA has announced the effective date of its new rule on motions to dismiss in securities arbitration cases. According to Regulatory Notice 09-07, new rules 12504 and 13504, that were approved by the SEC, become effective on February 23, 2009. In addition, FINRA has also imposed a moratorium on filing motions to dismiss in arbitration cases until the new rules are effective.
You can read the full notice at the link above. In a nutshell, motions to dismiss will not be granted until a party finishes presentation of their case-in-chief (i.e. - at a hearing), unless one of 3 exceptions exist: 1) prior settlement or release of party, 2) it is evidence that a respondent was not associated with the account, security or conduct at issue (mistaken identification), or 3) the claim is not eligible for arbitration (for example, the claims are too old).
We'll have to watch and see how this works out. MTDs can be an effective way to eliminate cases that obviously have no merit. Now, many of those cases will be forced to hearing, driving up costs for all of the parties involved.
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