George Friedman was quoted in an Investment News article about FINRA’s new proposal to amend its arbitration rules to allow investors in arbitration to take their claim to court if the brokerage or broker involved goes bankrupt during the proceedings.
The proposal builds on a current FINRA rule that allows investors to bypass arbitration, which is mandatory in brokerage contracts, if a firm goes out of business before a proceeding begins.
“It’s a logical, positive extension of FINRA’s effort to protect investors dealing with defunct firms,” said George Friedman, an adjunct law professor at Fordham University and a former director of FINRA arbitration.