For this SAC Roundtable discussion, we asked back George H. Friedman, who moderated our first-ever podcast, “What If the SEC Bans Pre-Dispute Arbitration Agreements?” To accommodate this new medium for informative and thought-stimulating programs relating to current topics in securities dispute resolution, we have established a separate Webpage on SAC’s Blog that can be reached by clicking the blue “Podcast” button in the right column on the Blog’s HomePage.
Mr. Friedman, former FINRA Director of Arbitration and long-time SAC Board of Editors member, helped us gather, as faculty for this Program, a panel of four experienced mediation individuals: mediator Roger M. Deitz, Esq.; Linda Drucker, Esq., Associate General Counsel, Charles Schwab & Co. Inc.; Christine Lazaro, Esq., Securities Clinic Director, St. Johns Law School; and Joe Peiffer, Esq., Partner, Peiffer Roca Wolf Abdullah Carr and Kane, LLC.
Why Focus on FINRA’s Mediation Department?
The topic of discussion was securities mediation today, in general terms, but, more specifically, the continuing role of FINRA’s Mediation Department in the mediation mix. FINRA’s mediation program – the first in the securities field – is celebrating its twentieth anniversary this year. Over the past two decades, over 17,000 disputes have been referred to FINRA mediation. As we enter 2015, the program is at a crossroad. The number of staff dedicated to mediation has declined and competitors have emerged in the form of other dispute resolution providers and, even, the mediators themselves.
This Roundtable discussion was recorded on February 26 and the finished podcast, complete with a PowerPoint accompaniment outlining the conversation, was uploaded to YouTube just this week. It begins with a history of the use of mediation as a dispute resolution technique to resolve securities disputes – a tour that Roger Deitz guides us through. (ed: For even more detail on this perspective, please refer to SAC’s 1995 interview with FINRA’s Ken Andrichik, who was then NASD’s Director of Mediation. See 7 SAC 9&10(1), “Getting Serious About Mediation: An Interview with Kenneth L. Andrichik”)
Mediation Activities and FINRA’s Optimal Role
Mr. Friedman described briefly how cases enter FINRA Mediation and he then asked Christine Lazaro, as a leader of one of the college-sponsored Securities Arbitration Clinics, to relate her experiences with FINRA’s telephonic mediation program for Small Claims cases. After these introductory pieces, the discussion ranged more widely into a conversation about how mediation works with larger cases, whether FINRA Mediation generally has a role in those cases and, ultimately, what its role could and should be. The panel also discussed who competes with FINRA for securities mediations, concluding that it is often the mediators themselves.
The conversation turned next to the contribution that technology now makes to securities mediations and the prospects for the future. As with the first podcast on the possibility of an SEC-ordered PDAA ban, Mr. Friedman ended the mediation podcast with a roll call of the panelists on what they foresee for securities mediation and FINRA’s Mediation Department five years from now. Will the Department still exist? Is it worth subsidizing the program to maintain its support for mediation? What changes might be made to streamline its operation and to hone its mission statement?
(ed: *Among the surprises emanating from this Roundtable discussion were panelists’ reactions to “opt in-opt out” alternatives for mediation within the FINRA arbitration program – a topic that appears to be on the FINRA DR Task Force’s agenda. **We were very pleased to see that almost 200 viewers have visited YouTube to see SAC’s first podcast --- that’s more people than attend a popular securities arbitration program! We invite all those interested in mediation to listen to this podcast. We believe it holds real insights and ideas for mediation’s future, while depicting graphically the importance that mediation has assumed in resolving securities disputes today.)
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