Bogus Arbitrator Credentials Call Awards Into Question

Some forty Wall Street securities arbitration cases dating back more than fifteen years may be compromised because an arbitrator allegedly lied about being a lawyer. FINRA, the Financial Industry Regulatory Authority that runs a mandatory arbitration forum where brokerages and investors resolve their disputes, removed the arbitrator who said he was a lawyer and a member of the bar in several states, when he was not. The former FINRA panelist claimed he was a "lawyer" (putting the word in quotes himself), but admits he was never licensed in Florida or New York, though he maintains California's bar must have lost his records. FINRA has reportedly been trying to improve perceptions of fairness to investors in its arbitration system. It also recently bolstered measures to police its arbitrators. Nonetheless, this news is likely to be more ammunition for mandatory arbitration clause critics. This revelation raises questions about whether the parties might attempt to overturn those decisions. It is unclear whether an arbitrator's fraudulent misrepresentations could give rise to new hearings. Apparently, a lawyer by the same name has informed the state bar association and the California attorney general's office about the matter, in the event the arbitrator appropriated a background other than his own. See story here-- http://reut.rs/1jAuv9S