The appointment, determination or selection of securities arbitrators and securities arbitration panels can vary depending on the forum where the arbitration was filed. The parties to a securities arbitration can typically participate actively in the selection of the arbitrators. However, the arbitrator selection rules of the sponsoring organization may vary regarding the degree of party participation in arbitrator selection.
Striking, Ranking and Appointing Arbitrators
Under the NASD arbitrator selection rules, an automated process called the Neutral List Selection System (NLSS) generates lists of arbitrators for parties to either strike or rank according to their preference. NLSS generates these lists by sorting and searching for arbitrators according to public and non-public classification, geographic hearing location, rotation, conflict of interest, and upon request, subject-matter knowledge. Once parties rank arbitrators, NLSS is used to consolidate rankings and appoint arbitrators.
At other sponsoring organizations, an arbitrator or a panel of arbitrators may be appointed, subject to challenges by the parties. The New York Stock Exchange (NYSE) offers parties, upon their agreement, the option of selecting how arbitrators are selected. They will notify the parties of the names, current affiliations, and 10 years’ business histories of the proposed arbitrators. In addition, parties are informed of any information disclosed pursuant to the Uniform Code and the Code of Ethics for Arbitrators by any arbitrator. The arbitrators are informed of the names of the parties to the dispute, counsel, witnesses, and the nature of the issues raised. If an arbitrator determines that he or she cannot render a fair and impartial award, a substitute arbitrator will be appointed.
Challenging, Rejecting Or Striking An Arbitrator
Typically, a party has an absolute right to a peremptory challenge, i.e. to reject or strike an arbitrator from the arbitrator list without giving a reason. This right may typically be exercised by filing a written notice of a challenge with the appropriate authority within the time period set in the rules.
In addition, a party is entitled to an unlimited number of challenges for cause. A challenge for cause to an arbitrator may be granted where it is reasonable to infer an absence of impartiality, the presence of bias, or, the existence of some interest on the part of the arbitrator in the outcome of the arbitration. The interest or bias of the arbitrator should be direct, definite, and capable of reasonable demonstration, rather than remote or speculative.
If You Lost Money In Your Investment, Retirement Or Brokerage Account, You May Be Entitled To Recover Your Investment Losses Through Securities Arbitration.
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