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New PIABA Prez Targets Expungement, Arbitrator Classes

11/5/2001

Compliance Reporter

The newly appointed president of the Public Investors Arbitration Bar Association, Philip Aidikoff, is prioritizing expungement and arbitrator classification. Aidikoff, partner at Aidikoff & Uhl in Beverly Hills, California, said he backs a National Association of Securities Dealers Notice to Members 01-65 to establish criteria for expunging items from the Central Registration Depository. Comments for the proposal are due Nov. 24. Under the proposal, expungement of information that is a result of an arbitration hearing, for example, must contain statements that are deemed a factual impossibility or clear error; without legal merit; or defamatory in nature.

Aidikoff said the NASD proposal properly protect broker/dealer and brokers, citing the provision about expunging false and defamatory information. Customer complaints being expunged as a result of a private agreement between the firm and customer, was one PIABA concern, he noted, adding the public has a right to know if a rep has numerous complaints against him. PIABA has said the practice of expunging information from the CRD as a result of a settlement agreement means clients are ultimately responsible for policing and deciding what ends upon on a broker’s CRD complaint file (CR, 10/9/2000).

The issue of arbitrator definitions is another issue that has not been settled, Aidikoff said. Definitions of arbitrators from the Securities Industry Conference on Arbitration and the New York Stock Exchange are different from those at the NASD, he said, adding the definitions are important for the classification method of determining who sits on arbitration panels. The arbitrator definition issue was one for former PIABA president Seth Lipner, partner at Deutch & Lipner in Garden City, N.Y., who Aidikoff replaced after the PIABA annual meeting last month. Currently to be a public arbitrator, under NASD rules, attorneys need to have spent no more than 20% over 10 years (CR, 10/24/2000).

PIABA also filed a lawsuit in a U.S. District Court in New Jersey Oct. 29 against the Securities Arbitration Commentator, and its partner Commerce Clearing House, for access to its database of arbitration awards, which Aidikoff said are public documents. The NASD Dispute Resolution with SAC maintains a database of arbitration awards on line through SAC’s Web site. A PIABA announcement of the suit states it results from a CCH letter to PIABA accusing PIABA of violating unspecified intellectual property rights. CCH spokeswoman Marty Dale Walters said the suit asks the court to determine if PIABA can set up a database of awards using SAC and CCH data.


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