Securities Arbitration: Practice and Forms

To View the Electronic Version:
Securities Arbitration: Practice and Forms

Bonus! All of the accompanying sample pleadings and forms are included on a CD-ROM in PDF

About The Book:
Securities Arbitration: Practice and Forms is intended to be a start-to-finish guide and reference to the entire arbitration process for all types of participants, including public investors and their counsel, representatives of brokerage firms and other financial institutions (including inside counsel, outside counsel, and compliance directors and their staffs), members of the staffs of sponsoring organizations, and arbitrators themselves. This publication is designed to be an efficient tool that can be readily used by all participants at every stage in the arbitration process to deal with the various issues, questions and problems that arise in such proceedings. It has been written as a comprehensive text with special emphasis on practice and procedure. The features include checklists, sample forms and pleadings and other practice aids, as well as, where possible, practical advice from experienced securities lawyers. It is the intention of the author to update this publication as developments require with revised text, new forms, pleadings and practice aids, and, if necessary, new chapters covering additional subjects.

PART I:   SECURITIES ARBITRATION

Chapter 1 The Regulatory Framework of Securities Arbitration

•  1.01 Introduction: A History of Securities Arbitration

•  1.02 Background: SEC Oversight of the SRO Arbitration Programs

•  1.03 Relationship of SRO Arbitration Programs and SRO Disciplinary
          Departments

•  1.04 The Late 1980s Changes

•  1.05 The Arbitration Policy Task Force: Recommendations and Results

•  1.06 Other Projects To Improve Securities Arbitration

•  1.07 Use of Predispute Arbitration Clauses By the Securities 
          Industry in Agreements with its Customers

•  1.08 Federal and State Legislative Attention to Securities 
          Industry Arbitration

Chapter 2 Jurisdiction

•  2.01 Introduction

•  2.02 The Appropriate Arbitral Forum

•  2.03 Statute of Limitations

Chapter 3 The Arbitration Agreement

•  3.01 Introduction

•  3.02 Existence of the Arbitration Agreement

•  3.03 Scope of the Arbitration Agreement

•  3.04 Waiver

•  3.05 Practitioner's Checklist

Chapter 4 Determining Whether To Arbitrate or Litigate

•  4.01 Introduction

•  4.02 Availability of the Arbitration Alternative

•  4.03 The Choice Between Arbitration and Litigation: 
          Applicable Rules of Decision

•  4.04 The Choice Between Arbitration and Litigation: Decision Making "Style"

•  4.05 The Choice Between Arbitration and Litigation: Procedural Differences

•  4.06 The Decision To Arbitrate or Litigate: Miscellaneous Differences

Chapter 5 Compelling or Resisting Arbitration

•  5.01 Compelling and Resisting Arbitration

•  5.02 Substantive and Procedural Law Governing Arbitrability

•  5.03 Federal Arbitration Act

•  5.04 Procedure To Compel Arbitration

•  5.05 Jurisdictional Issues in Obtaining an Order To Compel Arbitration

•  5.06 Elements of Petitioner's Case

•  5.07 Elements of Respondent's Case

•  5.08 Is the Dispute Rendered Non-Arbitrable for Public Policy Reasons?

•  5.09 Stay of Litigation Under Section 3 Where Civil Action Is Already 
          Pending in State or Federal Court

•  5.10 Interaction of Sections 3 and 4

•  5.11 When a Lawsuit Presents Arbitrable and Non-Arbitrable Claims; 
          The Intertwining Doctrine

•  5.12 Sanctions Against Losing Party on Motion To Compel
          Arbitration or Stay Judicial Proceeding

•  5.13 Appealability of Grant or Denial of Order Compelling Arbitration

•  5.14 Discovery in Aid of Proceeding To Compel Arbitration

•  5.15 Judicial Relief Pending and in Aid of Arbitration

Chapter 6 Commencing an Arbitration Proceeding

•  6.01 Introduction

•  6.02 Representation Issues 

•  6.03 Rules for Commencing an Arbitration

•  6.04 Selecting the Arbitration Forum

•  6.05 Location of the Arbitration

•  6.06 Initiating the Arbitration

•  6.07 Answering the Complaint

•  6.08 Counterclaims, Cross-Claims, and Third Party Claims

•  6.09 Joinder, Consolidation and Severance

Chapter 7 Pre-Hearing Matters

•  7.01 Selection of Arbitrators

•  7.02 Discovery

•  7.03 The Importance of the Discovery Guide Documents and Additional Documents

•  7.04 Initial Pre-hearing Conference 

•  7.05 Pre-Hearing Motions

•  7.06 Location of Hearings

Chapter 8 The Conduct of the Hearing

•  8.01 Background

•  8.02 When Hearings Are Not Required

•  8.03 Failure of a Party To Appear

•  8.04 Who May Attend the Hearing

•  8.05 The Creation of a Record

•  8.06 Burden of Proof

•  8.07 Order of Proceedings

•  8.08 Reopening Hearings

•  8.09 Motion for Reconsideration

•  8.10 Rules of Evidence

•  8.11 Testimony

•  8.12 Documentary Evidence

•  8.13 Adjournments

•  8.14 The Arbitrators as Judges

Chapter 9 Remedies and Damages

•  9.01 Introduction

•  9.02 Damages

•  9.03 Equitable Relief

•  9.04 Expungement

•  9.05 Disciplinary Referrals

Chapter 10 The Award

•  10.01 The Deliberative Process

•  10.02 Form of Award and Contents

•  10.03 Public Availability of Awards

•  10.04 Res Judicata and Collateral Estoppel

•  10.05 Stare Decisis

•  10.06 Post-Award Contact with Arbitrators

Chapter 11 Enforcing or Appealing an Arbitral Award

•  11.01 Introduction

•  11.02 Forum and Venue Issues

•  11.03 Enforcing the Award
   
•  11.04 Challenging the Award
  
  

Chapter 12 Mediation: An Alternative to Arbitration

•  12.01 Introduction: What is Mediation?
  
  
•  12.02 History of Mediation in the Securities Industry
   
•  12.03 The Benefits of Mediation
   
•  12.04 The Mediation Process
   
•  12.05 The Future of Mediation 

• PART II:   LAW AND RULES

  Source 1-Arbitration and Mediation Forums

  Source 2-Federal Arbitration Act

  Source 3-NASD Code of Arbitration Procedure

  Source 3A-Arbitration Procedure for Customer Disputes

  Source 3B-Arbitration Procedure for Industry Disputes

  Source 3C-Mediation Procedure

  Source 3D-Comparison Chart of Old and New Arbitration Codes for Customer Disputes

  Source 4A-FINRA Dispute Resolution Party's Reference Guide-National Edition

  Source 4B-FINRA Dispute Resolution Party's Reference Guide-Simplified

  Source 5-New York Stock Exchange Arbitration Rules

  Source 6-Chicago Board Options Exchange Arbitration Rules

  Source 7-Securities Industry Conference on Arbitration Uniform Code of Arbitration

  Source 8-The Arbitrator's Manual

  Source 9-Securities Arbitration Supplementary Procedures

  Source 10-Commercial Arbitration Association Commercial Dispute Resolution Procedures

  Source 11-JAMS Comprehensive Arbitratino Rules and Procedures

  Source 11A-Procedures for Securities Arbitrations Administered by JAMS under the Securities Industry Conference on Arbitration Non-SRO Pilot Program

  Source 12-Securities Industry Conference on Arbitration Proposal for a Pilot Program for Non-SRO-Sponsored arbitration Alternatives

  Source 13-Uniform Submission Agreement-Claimant & Respondent Forms

  PART III:  PLEADINGS AND FORMS

  Appendix 1: Arbitration Agreements

  Appendix 1A: Sample Customer's Agreement

  Appendix 1B: Arbitration Agreement from Clearing Agreement

  Appendix 1C: Excerpt from Form U-4 with Arbitration Provision Highlighted

  Appendix 2: Compelling and Resisting Arbitration

  Appendix 2A: Letter Demanding Arbitration and Requesting that Civil  
  Action Be Withdrawn

  Appendix 2B: Memorandum of Law in Support of Motion To Compel 
  Arbitration and To Stay Action

  Appendix 2C: Verified Petition For An Order Compelling Arbitration and Staying Proceedings

  Appendix 2D: Court Order Granting Motion To Compel Arbitration

  Appendix 3: Commencing the Arbitration Proceeding:Submission Agreements/Statements of Claim

  Appendix 3A: Special Procedures for California Cases: FINRA Dispute Resolution Guidelines for Compliance

  Appendix 3B: Special Procedures for New Jersey Cases: FINRA Dispute Resolution Guidelines and FAQ's for New Jersey Cases Involving Out-of-State Attorneys

  Appendix 3C: Letter Submitting Customer Dispute to Arbitration

  Appendix 3D: Claim Information Sheet

  Appendix 3E: Statement of Claim

  Appendix 3F: FINRA Arbitration Uniform Submission Agreement

  Appendix 3G: FINRA Deficiency Letter Regarding Commencement

  of Arbitration Proceeding

  Appendix 3H: Letter to FINRA Requesting Consolidation of Claims

  Appendix 3I: FINRA Request for Response to Letter Requesting 
  Consolidation of Claims

  Appendix 3J: NYSE Letter Serving Statement of Claim

  Appendix 3K: FINRA Letter Serving Statement of Claim

  Appendix 3L: FINRA Letter Regarding Arbitrator Selection Process

  Appendix 3M: NYSE Letter Regarding Arbitrator Selection Process

  Appendix 4: Answers, Counterclaims, and Third Party Claims

  Appendix 4A: Respondent Counsel's Letter (Answer) to AAA Denying 
  Petitioner's Claims

  Appendix 4B: Answer in Paragraph Pleading Form (Includes Affirmative Defenses)

  Appendix 4C: Answer in Form of Letter

  Appendix 4D: Answer in Narrative Form

  Appendix 4E: Counterclaim and Third Party Claim

  Appendix 4F: FINRA Dispute Resolution Letter That Pleadings Are Complete, Panel Composition, etc.

  Appendix 4G: FINRA Certificate of Service Form

  Appendix 5: Pre-Hearing Discovery and Motion Practice

  Appendix 5A: FINRA Pre-Hearing Conference Scheduling Letter

  Appendix 5B: FINRA Dispute Resolution Letter Announcing Pre-Hearing Conference, Evidentiary Hearing and Other Issues

  Appendix 5C: FINRA Dispute Resolution Letter Regarding Procedure For Direct Communication

  Appendix 5D: FINRA Dispute Resolution Case Information Sheet

  Appendix 5E: AAA Letter Selecting Arbitrator

  Appendix 5F: AAA Preliminary Hearing Calendar Form

  Appendix 5G: AAA Stipulation Regarding Direct Written Communication with Arbitrators

  Appendix 5H: AAA Letter and Arbitrator Order Regarding Preliminary Hearing

  Appendix 5I: AAA Letter and Notice of Preliminary Hearing

  Appendix 5J AAA Notice of Arbitration Hearing

  Appendix 5K: Claimant's Information and Document Request: Customer Complaint
•  
• Appendix 5L Respondent's Information and Document Request: Customer Complaint

• Appendix 5M Respondent's Document and Information Request: Intra-Industry Dispute

  Appendix 5N Claimant's Response to Respondent’s Request for Documents

  Appendix 5O Claimant's Response to Respondent’s Request for Information

  Appendix 5P AAA Form-Claimant's Response to Respondent’s Request for Production of Documents and Information

  Appendix 5Q NYSE Respondent's Response to Request for Information/Documents

  Appendix 5R FINRA Respondent's Response and Objections to Request for Production of Documents

  Appendix 5S AAA Respondents' Responses to Request for Documents

  Appendix 5T Counsel's Letter to FINRA Requesting Arbitration Panel to Direct Non-Party to Produce Documents

  Appendix 5U FINRA Third Party Subpoena To Respondent’s Former Employees Regarding Document Production

  Appendix 5V Motion to Compel Production of Information and Documents

  Appendix 5W Motion to Dismiss (or, in the Alternative, Answer)

  Appendix 5X Counsel's Request for Appearance of Witnesses and Production of Documents at Hearing

  Appendix 5Y Counsel's Notice of Witnesses Who Will Be Present and Documents to be Presented at Hearing

  Appendix 5Z Confidentiality Agreement Concerning Discovery

  APPENDIX 6: POST-HEARING BRIEFS

  Appendix 6A AAA Claimant's Post-Hearing Statement

  Appendix 6B AAA Respondent's Post-Hearing Brief

  APPENDIX 7: SETTLEMENT PROCEDURES

  Appendix 7A FINRA Letter Acknowledging Settlement

  Appendix 7B AAA Letter Acknowledging Settlement

  Appendix 7C Mutual Release and Settlement Agreement

  APPENDIX 8: ARBITRATORS’ AWARDS

  Appendix 8A FINRA Award Form

  Appendix 8B AAA Award Form

  Appendix 8C CBOE Arbitrators' Award Form

  APPENDIX 9: MEDIATION

  Appendix 9A FINRA Request for Mediation

  Appendix 9B FINRA Mediation Submission Agreement

  Appendix 9C FINRA Mediator Selection Letter

  Appendix 9D FINRA Confirmation Letter to Mediator

  Appendix 9E FINRA Mediation Session Confirmation

  Appendix 9F American Arbitration Association Submission to Dispute Resolution

  Appendix 9G JAMS Securities-Related Disputes Mediation Submission Form

  Appendix 9H Standard JAMS Securities Mediation Agreement

   

W. Reece Bader is a Partner in the Frankfurt office of Orrick and is a member of the Securities Litigation/Regulatory Group. Prior to moving to the Washington, D.C. office in 2006, Mr. Bader was located in the firm's Silicon Valley, New York and San Francisco offices. He has concentrated his practice in the area of securities and futures litigation since 1970. He has extensive experience, including substantial jury and non-jury trial work in broker-dealer litigation including securities, commodities and public finance. He also handles appellate matters and has represented the Securities Industry Association as amicus curiae in broker-dealer litigation. He has acted as lead defense counsel in complex class actions involving initial public offerings and derivative suits, both on behalf of underwriters, companies and officers and directors. He also regularly represents broker-dealers and individuals in both SEC and SRO enforcement actions. Mr. Bader has argued cases before the D.C., Second, Third, Ninth and Federal Circuits. He serves as an arbitrator for FINRA, NYSE and NFA, and the Center for Public Resources (Distinguished Neutrals Panel). He is a former member of the National Arbitration and Mediation Committee of the NASDR, past Co-Chair of the Securities Litigation Committee, and past Co-Chair of the Alternative Dispute Resolution Committee of the ABA’s Litigation Section. Mr. Bader is a frequent lecturer and panelist for such organizations as the Practising Law Institute, ALI/ABA, FINRA and the Securities Industry and Financial Markets Association.