FINRA Launches Phone Mediation

The lower-cost alternative is voluntary and open to cases involving claims of $50,000 or less

More On Legal & Compliance

from The Advisor's Professional Library
  • RIAs and Customer Identification Just as RIAs owe a duty to diligently protect their clients’ privacy and guard against theft, firms also play a vital role in customer identification. Although RIAs are not subject to an anti-money laundering rule, securities regulators expect advisors to address these issues in their policies and procedures.
  • Dealings With Qualified Clients and Accredited Investors Depending upon an RIAs business model and investment strategies, it may be important to identify “qualified clients” and “accredited investors.”  The Dodd-Frank Act authorized the SEC to change which clients are defined by those terms.

The Financial Industry Regulatory Authority (FINRA) announced Wednesday that it has launched a pilot program offering parties in simplified cases pro bono or reduced-fee telephone mediation.

Participation in the pilot program, which began on Jan.15, is voluntary and open to cases involving claims of $50,000 or less, FINRA says.

“Telephone mediation is a lower-cost alternative, and would benefit dispute resolution forum users in many ways,” said Linda Fienberg, president of FINRA Dispute Resolution, in a statement. “Besides eliminating the travel and preparation costs typically associated with in-person mediation, telephonic mediation offers greater convenience and flexibility, and is a practical alternative for all parties involved.”

Parties interested in participating in the pilot can notify FINRA by visiting www.finra.org/arbitrationmediation/smallclaims. Also, FINRA says staff will notify eligible parties about the pilot program.

Mediators would serve on a pro bono basis on cases involving claims of $25,000 or less in damages. Reduced-fee mediation ($50 per hour) would be available on cases with damage claims between $25,000.01 and $50,000. FINRA says it will not charge any administrative fee for these cases.

Reprints Discuss this story
This is where the comments go.