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FINRA Releases Arbitrator Diversity Data for the First Time

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For the first time, the Financial Industry Regulatory Authority on Tuesday morning published data on the diversity of its arbitrator pool on its website. The move comes after complaints that FINRA panels were skewed toward older men and that transparency on arbitrators’ backgrounds was lacking.

The information is available on a new section of FINRA’s website: Our Commitment to Achieving Arbitrator and Mediator Diversity at FINRA.

In 2014, FINRA appointed an arbitration task force to its securities arbitration forum to suggest ways to improve the self-regulator’s transparency, impartiality and efficiency. Richard Berry, FINRA’s head of Dispute Resolution, has made launching such an online resource a top priority, FINRA said.

FINRA wants to “show we are committed to making steady progress in this area,” Berry said, noting the “significant short-term progress” in recruiting African-Americans and women. 

Of those arbitrators who joined the roster in 2016, 14% were African-American and 33% were women (in 2015, 4% were African-American and 26% were women).

“While we are encouraged by these short-term results and incremental progress made, we recognize this is a long-term effort,” Berry added. “There is more progress to make and we remain fully committed toward achieving our diversity goals.”

The new web page will be updated annually with yearly survey results from Aon Hewitt, according to FINRA.

In 2016, FINRA recruited 945 arbitrator applicants, surpassing its goal of 750.

As it stands now, there are more than 7,200 arbitrators on FINRA’s roster

Jenice Malecki, a New York securities attorney, former FINRA arbitrator and a prominent member of the Public Investors Arbitration Bar Association, which has been critical of the lack of diversity on FINRA’s arbitration panels, commented on the site that FINRA is doing a great job.

“I’m on the NAMC and FINRA is recruiting people [as arbitrator applicants] like you wouldn’t believe! All kinds of diversity,” said Maleki, referring to the National Arbitration and Mediation Committee, which is tasked with approving arbitrator applicants.

FINRA’s Office of Dispute Resolution is holding an arbitrator and mediator recruitment event at the Congressional Black Caucus Foundation Annual Legislative Conference in Washington Sept. 21 to 24.

Interested candidates with at least five years of professional work experience and two years of college credits are encouraged to attend the conference to learn how to become an arbitrator.

FINRA’s participation is part of a recruitment campaign launched in December 2015 to expand the depth and diversity of the arbitrator and mediator roster.

FINRA representatives attend 15 diversity-based professional conferences each year with a focus on adding arbitrators from diverse backgrounds, professions and geographical locations. The regulators attended the Congressional Black Caucus conference last year.

Rep. Greg Meeks, D-N.Y., added in a statement that he’s “pleased that FINRA is working closely with the Congressional Black Caucus to add more African-Americans and other minorities to its roster of arbitrators and mediators. This demonstrates FINRA’s commitment to enhancing diversity and I hope they continue to move the ball forward.”

FINRA’s Berry added that the regulator is “happy to once again partner with the Congressional Black Caucus and [is] very grateful for Representative Meeks’ support of our increased efforts to recruit individuals from more diverse backgrounds.”

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