PIABA to Push SEC to Revise Form CRS, New President Says

Michael Edmiston, the new president of the Public Investors Advocate Bar Association (PIABA), says the group will be pressing the Securities and Exchange Commission in the next year to revise its customer relationship summary, or Form CRS.

Edmiston, a securities attorney with Jonathan W. Evans & Associates in Studio City, California, on Oct. 29 started his one-year term as president of the group, an association of lawyers who represent investors in disputes with the securities industry.

“PIABA will be calling for the SEC to revise the form [CRS] to include insurance and dispute resolution disclosures so that investors can make an informed decision about whether to become customers of a given firm,” Edmiston said in a statement.

“Giving a prospective customer sufficient information to make an informed decision about whether to start a relationship with a financial professional is more than just discussing the type of securities or services the professional will provide, or disclosure of conflicts the professional may have,” Edmiston said.

“For an industry preaching financial responsibility, it is reasonable and fair to expect the firm to disclose whether it has the financial ability to pay any claim, award or judgment if a dispute arises with an investor customer,” he argued.

Similarly, he continued, “disclosure of the existence of any arbitration clause, including the mandated forum, the forum rules, and anticipated expenses, is equally important to a customer. No one wants to have a dispute. Helping a customer to understand the consequence and expense of bringing a claim to try to resolve a dispute is reasonable, and it is material information for a customer in deciding whether to do business with a firm.”

The group, Edmiston said, will also continue work “to fix unpaid arbitration awards” in the financial services industry, which he said ”remain a scourge.”

About 30% of all customer awards remain unpaid, he said, “despite FINRA’s efforts to address the problem.”

While PIABA supports the Financial Industry Regulatory Authority’s efforts “to eliminate bad actors on the front end, none of its efforts resolve the fundamental problem: when a customer, having lost their savings, goes to a mandated arbitration forum, proves their case and obtains an arbitration award, but the bad actor never pays the award,” he maintained. “The investor is twice harmed. More must be done to protect these investors.”

The group will also continue to work with the SEC to study the unpaid award problem, Edmiston said, and to exercise the securities regulator’s authority under Section 921 of the Dodd-Frank Act to make changes to the process.

Pictured: Michael Edmiston of Jonathan W. Evans & Associates.