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NASD Proposes Arbitration Rule Change

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  • Baker, John
    The SEC has published notice of a proposed NASD rule change to prohibit terminated, suspended, barred, or otherwise defunct firms from enforcing predispute
    Message 1 of 2 , Mar 11, 2001
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      The SEC has published notice of a proposed NASD rule change to
      prohibit terminated, suspended, barred, or otherwise defunct firms from
      enforcing predispute arbitration agreements. Release No. 34-43998, 66 Fed.
      Reg. 13362 (Feb. 23, 2001). The proposed rule change is one of several
      steps the NASD is taking to address a finding by the Government Accounting
      Office that a significant percentage of customers' awards from 1998 were
      unpaid. Most of the unapid awards involved arbitration cases against firms
      terminated from membership or that had filed for bankruptcy; investors
      collect their awards in well over 90% of the NASD cases involving active
      firms. The rule filing also describes active steps that the NASD is taking
      to monitor and track compliance with arbitration awards by members and
      associated persons.

      The notice was published in the Federal Register on March 5.
      Federal Register documents may be searched online at

      http://www.access.gpo.gov/su_docs/aces/aces140.html

      My prior post on the GAO report, Securities Arbitration: Actions
      Needed to Address Problem of Unpaid Awards, No. GAO/GGD-00-115 (June 2000),
      is available online at

      http://groups.yahoo.com/group/fundlaw/message/250

      The GAO report itself apparently is no longer available at the GAO's
      web site, but it can be accessed from the Government Printing Office's site
      at

      http://www.access.gpo.gov/su_docs/aces/aces160.shtml


      John M. Baker <JBaker@...>
      Stradley, Ronon, Stevens & Young, LLP
      1220 19th Street, N.W., Suite 700, Washington, DC 20036
      (202) 822-9611 Fax (202) 822-0140
      FundLaw Listowner Http://groups.yahoo.com/group/fundlaw
    • jbaker@stradley.com
      The SEC has approved the NASD arbitration rule change, and the new rule will be effective on June 11, 2001. Release No. 34-44158, 66 Fed. Reg. 19267 (Apr. 6,
      Message 2 of 2 , May 11, 2001
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        The SEC has approved the NASD arbitration rule change, and the new
        rule will be effective on June 11, 2001. Release No. 34-44158, 66
        Fed. Reg. 19267 (Apr. 6, 2001); NASD Notice to Members 01-29 (May
        2001). The NASD Notice may be accessed in text or PDF format at

        http://www.nasdr.com/2610_2001.asp#May

        The Government Accounting Office, in a follow-up to last year's
        rather critical report, has noted approvingly that securities
        regulators have taken a number of positive steps and that limited
        data suggest that the rate of unpaid awards has declined. Evaluation
        of Steps Taken to Address the Problem of Unpaid Arbitration Awards,
        No. GAO-01-654R (Apr. 27, 2001). The GAO letter to Representatives
        Dingell and Markey is available online at

        http://www.gao.gov/new.items/d01654r.pdf


        John M. Baker <JBaker@...>
        Stradley, Ronon, Stevens & Young, LLP Http://www.stradley.com
        1220 19th Street, N.W., Suite 700, Washington, DC 20036
        (202) 822-9611 Fax (202) 822-0140
        FundLaw Listowner Http://groups.yahoo.com/group/fundlaw


        --- In fundlaw@y..., "Baker, John" <jbaker@s...> wrote:
        > The SEC has published notice of a proposed NASD rule change to
        > prohibit terminated, suspended, barred, or otherwise defunct firms
        from
        > enforcing predispute arbitration agreements. Release No. 34-43998,
        66 Fed.
        > Reg. 13362 (Feb. 23, 2001). The proposed rule change is one of
        several
        > steps the NASD is taking to address a finding by the Government
        Accounting
        > Office that a significant percentage of customers' awards from 1998
        were
        > unpaid. Most of the unapid awards involved arbitration cases
        against firms
        > terminated from membership or that had filed for bankruptcy;
        investors
        > collect their awards in well over 90% of the NASD cases involving
        active
        > firms. The rule filing also describes active steps that the NASD
        is taking
        > to monitor and track compliance with arbitration awards by members
        and
        > associated persons.
        >
        > The notice was published in the Federal Register on March 5.
        > Federal Register documents may be searched online at
        >
        > http://www.access.gpo.gov/su_docs/aces/aces140.html
        >
        > My prior post on the GAO report, Securities Arbitration:
        Actions
        > Needed to Address Problem of Unpaid Awards, No. GAO/GGD-00-115
        (June 2000),
        > is available online at
        >
        > http://groups.yahoo.com/group/fundlaw/message/250
        >
        > The GAO report itself apparently is no longer available at
        the GAO's
        > web site, but it can be accessed from the Government Printing
        Office's site
        > at
        >
        > http://www.access.gpo.gov/su_docs/aces/aces160.shtml
        >
        >
        > John M. Baker <JBaker@S...>
        > Stradley, Ronon, Stevens & Young, LLP
        > 1220 19th Street, N.W., Suite 700, Washington, DC 20036
        > (202) 822-9611 Fax (202) 822-0140
        > FundLaw Listowner Http://groups.yahoo.com/group/fundlaw
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