I’ve written previously about the Financial Regulatory Authority (FINRA) proposals for allowing consumer complainants in arbitrations to use all public arbitration panels.  Non-public (or industry) panel members are those who work within the financial services industry.  Claims for over $100,000 are heard by a panel of three arbitrators.  Studies have shown a perception among complainants that the FINRA arbitration process, often mandated by brokerage agreements, is biased against consumers at least in part by the participation of industry panelists.  Thanks to an approval from the Securities and Exchange Commission (SEC), claimants can now opt for a full public panel.

The recently enacted Dodd-Frank Act mandated that the SEC study the fairness of the “mandatory” securities industry arbitration process.  Whether this change will move the opinion of the SEC is open to debate.