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FINRA In-Person Hearings Further Postponed Until July 31

Posted on: May 20th, 2020

By: Kathleen Cusack and Kirsten Patzer

On Friday, May 15, 2020, amidst continued concern over the potential spread of COVID-19, the Financial Industry Regulatory Authority (FINRA) postponed all in-person arbitration and mediation proceedings until July 31, 2020. FINRA initially postponed in-person meetings beginning in March and extended the suspension several times. 

In its most recent announcement, FINRA also offered to waive the postponement fee if parties agree to reschedule in-person hearings currently scheduled between July 31 and September 4, 2020. All other case deadlines continue to apply. 

As an alternative to in-person meetings, videoconferencing or telephonic meetings are permissible if requested by parties or if mandated by arbitrators. This option is reportedly unpopular and infrequently utilized. And when it has been utilized, the outcomes are subject to scrutiny and may lead to awards being overturned.

A recent FINRA award has resulted in Wunderlich Securities, Inc. filing an action in the U.S. District Court for the Southern District of New York asking that the $11.4 million award issued against them in March be vacated after the final hearing was held via Zoom. According to Wunderlich, the panel had been inattentive throughout the entire proceeding, held over the course of 9 sessions, with the final session being the only one not held in person. During the Zoom videoconference, one arbitrator would look at other screens, typing, and eating during testimony, another arbitrator completely blocked her screen, and during closing arguments, one of the panelists completely walked away from his screen. After the final hearing Wunderlich filed a motion requesting that the panel recuse itself. That motion was unanimously denied by the panel.

The original FINRA arbitration was Dominick & Dickerman LLC, Michael John Campbell v. Wunderlich Securities, Inc., available here. The Petition to Vacate for that case, available here.  

If you have questions or would like more information, please contact Kirsten Patzer at [email protected] or Kathleen Cusack at [email protected]

Additional Information:

The FMG Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues on a regular basis.  Click here to view upcoming webinars.

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients.  Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments.  For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER:  The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19.  The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement.  We can only give legal advice to clients.  Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG.  An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest.  As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such.  We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.**

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