New Rule on Broker Promissory Note Arbitration

Effective September 14, 2009, FINRA will begin expediting the administration of cases that solely involve a brokerage firm’s claim than an associated person (broker or financial advisor) failed to pay money owed on a promissory note.

Under the new procedures, a single public arbitrator from the FINRA roster of arbitrators approved to hear statutory discrimination claims will decide such promissory note cases. FINRA amended Rule 13214 and 13600 of the Code of Arbitration Procedure for industry disputes to make conforming changes.

The SEC approved new FINRA Rule 13806 and amendments to FINRA Rules 13214 and 13600 relating to promissory note proceedings.

FINRA is amending its Code of Arbitration Procedure for Industry Disputes to establish new procedures for administering cases that solely involve a firm’s claim that an associated person failed to pay money owed on a promissory note. In the absence of additional allegations by firms or associated persons, promissory note cases involve straightforward contracts with few documents entered into evidence. Rule 13806 is limited to claims related to promissory notes with no additional allegations being made in the Statement of Claim. Rule 13806 provides that a single public arbitrator from the roster of arbitrators approved to hear statutory discrimination claims will serve on the arbitration panel hearing a promissory note case.

If you have questions about this new FINRA Rule, or if you need representation in a dispute brought against you by your former brokerage firm, The White Law Group may be able to help. To speak to a securities attorney, please call our Chicago office at 312-238-9650 for a free consultation.

The White Law Group is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.

For more information on The White Law Group, visit http://whitesecuritieslaw.com.