Securities Litigation

Last week, FINRA issued Regulatory Notice 21-16 cautioning member firms against attempting to limit customer claims through language in mandatory pre-dispute arbitration agreements. Rule 2628 prescribes disclosure requirements for arbitration clauses and generally prohibits provisions that contradict other FINRA Rules.

The Notice specifically cautions against several provisions that improperly limit customer claims:

First, firms cannot specify hearing locations, because FINRA Rule 12213 provides the Arbitration Director will. FINRA usually schedules hearings ...