Report: Arbitrations handled by non-lawyers can harm investors

DEC 18, 2017

A report by the Public Investors Arbitration Bar Association charges that investors using a non-attorney representative in a mandatory arbitration may suffer "sometimes severe consequences." PIABA, whose member attorneys represent investors in securities disputes, said the use of non-attorney representatives in place of lawyers can lead to shoddy representation of investors since they are not required to have malpractice insurance, do not operate under an ethical code or constraints, and are not subject to sanctions from a regulatory body like a state bar association. The Financial Industry Regulatory Authority Inc. should require attorneys in nearly all situations, the new report concluded. PIABA said that some non-attroney reps had imposed non-refundable $25,000 deposits, absconded with settlement funds and represented investors without their knowledge. In one case, PIABA said that a non-attorney representative was a former broker who had worked at seven firms, including four that had been expelled from the industry. In another case, the manager of a "recovery firm" was found to have been barred from the securities industry after failing to disclose several liens and judgments against him, as well as a bankruptcy filing.

Latest News

NASAA moves to let state RIAs use client testimonials, aligning with SEC rule
NASAA moves to let state RIAs use client testimonials, aligning with SEC rule

A new proposal could end the ban on promoting client reviews in states like California and Connecticut, giving state-registered advisors a level playing field with their SEC-registered peers.

Could 401(k) plan participants gain from guided personalization?
Could 401(k) plan participants gain from guided personalization?

Morningstar research data show improved retirement trajectories for self-directors and allocators placed in managed accounts.

UBS sees a net loss of 111 financial advisors in the Americas during the second quarter
UBS sees a net loss of 111 financial advisors in the Americas during the second quarter

Some in the industry say that more UBS financial advisors this year will be heading for the exits.

JPMorgan reopens fight with fintechs, crypto over fees for customer data
JPMorgan reopens fight with fintechs, crypto over fees for customer data

The Wall Street giant has blasted data middlemen as digital freeloaders, but tech firms and consumer advocates are pushing back.

The average retiree is facing $173K in health care costs, Fidelity says
The average retiree is facing $173K in health care costs, Fidelity says

Research reveals a 4% year-on-year increase in expenses that one in five Americans, including one-quarter of Gen Xers, say they have not planned for.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.