FINRA last week announced that the Securities and Exchange Commission has approved a new rule that will effectively eliminate motions to dismiss in FINRA arbitration cases. The new rule will require that arbitration panels deny motions to dismiss made before the claimant has presented his case at a hearing unless the motion falls within 3 exceptions: 1) the case has settled, 2) there is a factual impossibility in the case (meaning that it is factually impossible for a certain respondent to have engaged in the alleged wrongdoing) or 3) the case is too old (the case was filed more than six years after the alleged misconduct). Further, according to the release, a party who brings a MTD that is denied, will be assessed the costs and attorney's fees, and may not file another MTD without the consent of the panel.
No word yet on the effective date. FINRA will publish the new rule and effective date in a forthcoming notice.