FINRA WARNS ARBITRATION PARTICIPANTS REGARDING USE OF NON-LAWER REPRESENTATIVES
The Financial Industry Regulatory Authority (“FINRA”) conducts more than 99% of the securities-related legal disputes in the United States, pursuant to FINRA’s code of arbitration procedures. Participants in FINRA arbitration may represent themselves, may have an attorney representative, and (subject to certain exceptions) may even hire a non-attorney representative. FINRA’s New York-based director of dispute resolution, Richard Berry, speaking at a Practicing Law Institute conference in September, warned customers regarding the use of non-lawyer arbitration representatives. Berry called attention to allegations of exploitation of claimants by non-lawyer representatives who charged claimants $25,000 in non-refundable deposits for their representation, taking settlement money of which the claimants were not aware, and some even representing the customer claimants without getting their consent. Attorneys engaging in such conduct would not only be subject to discipline, including disbarment, by their state bars, but also would have malpractice insurance coverage. Non-lawyer representatives are not subject to such discipline and, as far as Berry was aware, do [...]