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Re: Getting Screwed
Chapman, Spira & Carson

From: Robert A. Spira
Date: 2/14/99
Time: 11:59:00 AM


I am an official arbitrator for the National Association of Securities Dealers and as such am well aware of that process. The system in most respects is elegant and the people that run it are trying to improve on it everyday. The hearings are professional and the judge and jury (arbitrators) if that is what it should be called are for the most part, knowledgeable and fair. The process is quick and by and large encompassing.

Where this process breaks down to some extent is the discovery process. Where anyone can be gotten to with a federal supeona, only people that have agreed to NASD arbitration can be examined unless they do it of their own volition. Thus, non members of the NASD are virtually impossible to examine and use in testimony. They can't be forced to appear.

Under most circumstances this is not critical. The average case has to do with the brokerage house and the customer having a disagreement over something overtrading, the wrong security was bought, the price was too high or low or something else along these lines. Let's say that it is case of overtrading. This is fairly straightforward, an expert witness can be brought in to testify as to what his or her opinion is and the arbitrators are more than qualified to determine, if indeed the claimed actions did take place.

For the most part there are no punitive damages awarded in securities arbitration, but that is changing. We could also say the same relative to appeal, this too is changing.

For inexpensive and fast judgement, this forum can't be beat, but if you need extensive discovery, this forum is not the place to go if you have a choice.

Robert Spira

Last changed: March 17, 2000