PIABA Files Petition with SEC to Allow Customers to Eliminate Industry Arbitrators

PIABA, the Public Investors Arbitration Bar Association, has filed a petition with the SEC, asking the SEC to eliminate arbitration rules that require the appointment of an industry or "non-public" arbitrator in customer cases involving claims of damages over $100,000.  According to the petition, "Requiring investors who believe they have been wronged by the securities industry to have claims decided by panels that must include a representative of that securities industry creates at the least the appearance of bias, if not actual bias."   PIABA's proposal would not seek to end the industry arbitrator position all together, but to give parties the option of choosing to have a panel consisting of entirely "public" arbitrators.  As I read it, the rule changes, if adopted, would allow each separately represented party to strike all names on the industry arbitrator list, thereby requiring that all arbitrators appointed to the case come from the public roster.  PIABA's petition can be found at the organization's website here.  I think we can expect some opposition to these changes from the industry side.  What is yet to be known is what position that FINRA Dispute Resolution will take on this matter.