"What I Perceive to be True I Believe to be True": Retail Investors Perceptions Concerning Securities Arbitration and how to Correct Them - Dispute Resolution Journal - Vol. 69, No. 2

Author(s):

David F. Ahluwalia

Page Count:

22 pages

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1 PDF Download

Published:

September, 2014

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“There are things known and there are things unknown,

and in between are the doors of perception.”

—Aldous Huxley

Critics of mandatory securities arbitration frequently assert that, if

the FINRA arbitration forum is perceived as fair, pre-dispute

arbitration agreements (PDAA) are not necessary because the parties

will agree post-dispute to arbitrate- and, if the forum is not perceived

as fair, investors should not be forced to arbitrate.1 To address this

and many other criticisms FINRA is engaged in a consistent process

of reforming and refining arbitration in order to improve the

procedures and its perception. At first blush the recent inclusion of an

all public arbitration panel may not increase investors’ perceptions on

the fairness of the process. This among many others is the reason

though why FINRA’s Chairman and CEO Richard Ketchum stated

that it was being implemented, to: “enhance confidence in and
increase the perception of fairness in the FINRA arbitration process.”2