A circuit split has recently widened regarding whether a securities broker-dealer may use a forum selection clause to deny clients access to the Financial Industry Regulatory Authority (FINRA) arbitral forum. Under FINRA Rule 12200, a dispute between a “member or associated person of a member” and a “customer” must be arbitrated at the customer’s request so long as the dispute “arises in connection with the business activities of the member or the associated person.” Broker-dealer attempts to avoid FINRA arbitration are being met with mixed results in the circuit courts of appeals.
March 12, 2019 Articles
Circuit Split Widens over Waiver of FINRA Arbitration Rights
Four circuit courts of appeals are split over whether a forum selection clause related to “all actions and proceedings” encompasses FINRA arbitration.
By Beth Graham
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