PIABA to continue reform push

The plaintiff's bar will continue pushing for the elimination of industry arbitrators, said Brian Smiley, the new president of the Public Investors Arbitration Bar Association. He is also a partner at Smiley Bishop & Porter LLP of Atlanta. Members of Norman, Okla.-based PIABA, which is holding its annual meeting in Colorado Springs, Colo., this week, think that having one industry arbitrator on three-person panels biases the arbitration system against public customers. The Financial Industry Regulatory Authority Inc. of New York and Washington has implemented a pilot program that allows a limited number of cases against the major firms to be heard with all public arbitrators. But Linda Fienberg, president of Finra dispute resolution, told PIABA meeting attendees that there have been “almost no cases” filed against the wirehouses under the pilot program, “to our great surprise.” The slow start with the pilot program is no surprise, given the slowdown in investor claims, Mr. Smiley said. And firms that have the most troubles, such as Lehman Brothers Holdings Inc. of New York and Morgan Keegan & Co. Inc., a Memphis, Tenn.-based subsidiary of Regions Financial Corp. of Birmingham, Ala., aren’t in the program, he said. Meanwhile, most plaintiff's attorneys think that the market crash will spur more investor lawsuits — and an upturn in their business — during the next several years.