Finra Postpones In-Person Arbitration Hearings Until May 1
The Financial Industry Regulatory Authority is postponing arbitration hearings in its dispute resolution forum until May 1, 2020, in response to the expanding coronavirus outbreak, according to a notice published to its website on Monday.
“We recognize that this decision may cause inconvenience and we do not make it lightly,” Finra wrote. “We are taking this preventative action out of an abundance of caution, in the interest of public safety.”
Against the uncertainties of the health crisis and the corollary market convulsion, the delay ranks as an inconvenience, lawyers said. Finra has 4,756 open cases, including 295 new claims filed at the end of January, according to the regulator’s dispute resolution website.
“We are very aware of the virus and of trying to keep social distance,” said Adam Gana, a plaintiffs’ lawyer in New York, “but justice delayed is justice denied. We fully intend to go forward with our hearings to the extent possible.”
Thomas B. Lewis, an employment lawyer at Stevens & Lee in Princeton, N.J., said he is glad Finra has mandated the delay rather than stick with its earlier guidance of having counterparties decide among themselves whether to reschedule proceedings.
“Both sides want to put on a strong front, so how do you tell clients maybe we should go to the other side and tell them maybe we should get this case adjourned,” he said of the earlier dilemma. “Would it be perceived as a sign of weakness?”
He and other lawyers also noted that many arbitrators are retired and in an age cohort most at risk if they are infected with Covid-19. Of Finra’s nearly 8,000 arbitrators, 43% are over 70, and 72% are over 60, according to the securities industry’s self-regulator.
Finra last week said it will entertain requests from member firms for delays in responding to investigations because of coronavirus disruptions, and will not require registration updates for employees working out of temporary offices as long as firms have “reasonably designed” supervisory systems in place.
Finra also has canceled its West Region Member Forum and its 2020 Diversity Summit, and is mulling whether to hold its large annual conference in Washington D.C. in May, according to its website.
A Finra spokeswoman did not immediately return a request for comment as to whether other functions have been affected by the national emergency that President Trump declared on Friday.
The Securities and Exchange Commission, which delegates certain regulatory functions to Finra, has extended the deadline for registered investment advisory firms to make certain filings. Filers whose annual Form ADV business updates were due to the regulator and customers on March 30, now have until April 30 to submit the data that includes fee schedules and disclosures of conflicts of interest.
The SEC also has offered public companies conditional regulatory relief on some filing deadlines. The regulator also has encouraged most of its employees to work from home.
The U.S. Supreme Court on Monday said it is postponing all oral arguments scheduled for this month, and the U.S. DIstrict Court for the Southern District in New York, which hears many Wall Street-related criminal cases, has suspended jury trials, along with courts in many venues.