Skip navigation

FINRA to Resume In-Person Hearings in July

After delaying reopening for face-to-face arbitration and mediation because of the COVID-19 pandemic, the regulatory agency will allow such proceedings at 62 of its 69 hearing venues starting July 5.

FINRA will resume in-person proceedings for arbitration and mediation at nearly all of its hearing locations throughout the country this summer, though the agency’s Dispute Resolution Services stressed that there will be additional safeguards to accommodate COVID-19 precautions. 

The move comes several weeks after one investor advocacy group urged FINRA to resume in-person hearings, arguing that the continued delays and postponements benefited brokerage firms at the expense of claimants who were losing out on chances to recoup alleged losses.

The regulatory agency will fully resume in-person proceedings at 62 out of its 69 hearing locations on July 5, according to its website. However, hearing locations in Augusta, Ga.; Boca Raton, Fla.; Buffalo, N.Y.; Detroit, Philadelphia, Providence, R.I.; and Wilmington, Del., will not reopen until July 30. 

FINRA first postponed in-person proceedings by several months in March 2020 after COVID-19 hit the United States, and continued to delay the start date while reviewing health conditions on a monthly basis.

Sander Ressler, the co-owner and managing director of Essential Edge Compliance Outsourcing Services, said a firm start date was a welcome development for everyone involved.

“It’s kind of like having a big boulder that’s in the middle of the stream,” Ressler said about the delays. “Some of the water can go around it, but it’s still a major impediment. But now the boulder is removed and the river is flowing again.”

FINRA’s Dispute Resolution Services also detailed the safety protocols it would have in place at each venue, including using venues that are large enough to accommodate social distancing, as well as requiring masks and providing “breakout rooms” so that each party, their counsel and arbitrators can meet privately while continuing to socially distance.

In a letter to FINRA last month, Public Investors Advocate Bar Association (PIABA) President David Meyer argued that many courts and several private arbitration forums throughout the country had already restarted face-to-face trials and meetings, and urged FINRA to do the same. 

Meyer said the agency had failed to disclose the health thresholds that needed to be met for in-person hearings to resume, and argued the indefinite delay benefited brokerage firms defending arbitration claims—some brokers and attorneys have also argued against using remote video in arbitration and disciplinary proceedings.

“Investors do not have the option to take their disputes to court so they are at the mercy of FINRA to timely administer its arbitration cases,” Meyer wrote.

Ressler said that many clients who had in-person hearings scheduled for July had been sitting “on pins and needles,” wondering if there would be a further delay in in-person proceedings. He predicted there would be a rush in the next 30 to 45 days of counsel, arbitrators, claimants and defendants scrambling to find available calendar time to hold hearings face-to-face. It will be all the more difficult for scheduling to align for everyone, as the continued postponements resulted in a backlog of cases moving forward.

“Arbitration’s supposed to be faster than court, but I don’t know with COVID whether that held true, and everyone’s getting pushed back,” he said. “I imagine by 2023, we’ll be back to a more traditional scheduling-out (of) four or six, to eight months, but right now we’re looking at commonly a year."

TAGS: Industry
Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.