Some plaintiffs attorneys claim theyre having problems with the NASDRs New York dispute resolution office. They say the situation worsened after the departure of long-time arbitration chief Deborah Masucci. Some attorneys claim New York cases are being overseen from Washington, D.C., which the NASD denies. Attorneys limit their criticisms to cases heard in the New York area and say other NASDR arbitration units are functioning well.
It seemed there used to he a core group of case counsel whod been there four or five years, says Mark Astarita, a New York attorney. Now every time I turn around theres someone new on the same case. It seems like no one has a handle on what is going on with a case. NASD staff attorneys are the only place Ive ever found where you try to leave a voice mail and youre told the mailbox is too full.
The NASD says New York cases are not being assigned to D.C., and that arbitration management, formerly under Masucci in New York, has not been moved to Washington. In one instance, an attorney moved to D.C. from New York and took her caseload, according to an NASD spokesperson. D.C. is one of the offices that handles some of the Northeast regions case volume. Other offices sometimes cover for one another, the spokesperson adds. But all New York area cases are handled out of that office, he says.
Only one or two of the New York office case counsel have been there more than a year, says Jeffrey Liddle, a New York attorney. Hes also concerned that in the past year, half of the case counsel assigned to New York arbitrations hes been involved with have come from the Washington Dispute Resolution Satellite Office. Most cases and most arbitrators are in New York, but theyre assigning people who dont understand the brokerage business, Liddle says.
The NASD spokesperson says more than half of the New York case counsel have been there more than a year There are eight case counsel in the New York office.
Astarita also complains about how decisions are made. There are a lot of inconsistencies in how [NASDR] counsel handles cases, says Astarita, which adds a lot of pressure to a case. Staff attorneys are competent, Astarita believes, but the issue is the unwritten rules. Someone will say we do something this way, but have no rule to back it up.
Arbitration panels are being given too much power by case counsel unwilling to get involved in a dispute, attorneys say. Liddle notes that out of his 175 days of hearings in the New York region last year, case counsel was present at only a half day of one hearing.
In a recent case, Liddle says arbitrators werent following NASD procedures in handling a settlement agreement that had been reached between both parties in a defamation case. I talked to the case counsel, and she said she couldnt get involved, he says. The settlement ultimately fell apart because of the arbitrators mishandling, Liddle claims.
The NASD spokesperson says staff is always on-call during hearing--that is office policy, but are not always in attendance at hearings. The forum... is designed to run on its own, without the presence of Dispute Resolution staff. Liddle says hes also had problems getting NASD arbitrators to recuse themselves when theyve admitted to conflict of interest. You used to be able to call case counsel and get them to talk to arbitrators when problems like that arose, he says. The difference from the NYSE is night and day. You have no fear of talking to them with a problerm Theyre proactive.
Another issue is getting approval of motions to dismiss or compel in an arbitration. Howard Eilen, an attorney in Uniondale, N.Y., typically submits such requests 30 days before a scheduled hearing. It shouldnt take panicked calls two days before a hearing to get approval.
But its nearly impossible to get an NASDR hearing adjourned, even when both sides agree, Astarita says.
Many problems with case counsel management of arbitrations can be blamed on lack of training for the case counsel position, Eilen believes. By the time the learning curve is mastered on the job, they move on to another position. It takes a while to develop a cookiecutter approach to nonemergency situations.
Attorneys generally agree that Masuccis departure hasnt caused the case counsel problems. But Liddle is concerned that moving oversight of arbitration to Washington, D.C., may be permanent and exacerbate case counsel problems. The NASD is searching for a candidate to fill the arbitration director post, but has placed the bar too high for anyone to be hired, Liddle says, noting that one of the job requirements is 10 years management experience of at least 50 people.