State Laws Protecting Seniors
The Defense Perspective
For many years now, FINRA has sought to implement the central precept of arbitration as an expeditious alternative to litigation for the elderly. This blog, Part 1, will provide an overview of FINRA's pronouncements on the subject as well as initiatives adopted by the SEC and NASAA. Parts 2 & 3 will discuss the defense bar's perspective and specific state laws on the subject, respectively.
On April 6, 2016, the same day the U.S. Department of Labor issued its new fiduciary rule, the White House set forth the reasons for and implications of it, including the following:
In the spring of 2016, the Department of Labor and the White House announced dramatic changes in the obligations of brokers in retirement accounts. A month before the April 2016 announcement, at SIFMA's 2016 Compliance & Legal Society Annual Seminar, the soon-to-be-announced Department of Labor fiduciary rule for retirement accounts was the subject of much conversation and analysis.
Recommendations For Arbitrator Selection
FINRA's Reclassification of Arbitrators
The best chance your client has to prevail in a FINRA securities arbitration is not necessarily dependent on the merits of the case but on the arbitrators selected by the parties to decide the case.
A fiduciary duty means that when a broker makes a recommendation to the customer, the broker's motivation must be in the customer's "best interest". For most brokers, that is their motivation. Where it is not, trouble can ensue. The extent to which such a duty continues after the purchase of a recommended security has resulted in decades of court decisions.