Finra’s ongoing suspension of in-person arbitration hearings protects brokers while harming investors involved in disputes, the Public Investors Advocate Bar Association asserted Monday. The Financial Industry Regulatory Authority Inc. halted in-person arbitration proceedings when the coronavirus pandemic broke out more than a year ago. It has extended the postponement through July 2.PIABA President David P. Meyer criticized the broker-dealer self-regulator for not explaining what health thresholds must be met to resume in-person hearings.“The lack of transparency is concerning, particularly since the indefinite delay in Finra in-person hearings benefits the Finra-member brokers and brokerages firms defending the arbitration claims brought by their customers in this forum,” Meyer wrote in a letter Monday to Richard W. Berry, Finra executive vice president and director of Finra Dispute Resolution Services.Finra has restricted arbitration hearings in all 69 of its hearing locations. Meyer said PIABA analyzed the 20 largest Finra hearing locations and found that every jurisdiction is conducting in-person trials or plans to do so by July, highlighting courts in San Diego, New Mexico, Montana and Texas.“The bottom line is that if courts across the country can safely conduct civil jury trials, there is no question that Finra can facilitate in-person hearings,” Meyer wrote. Deepen relationships by leveraging ‘micro events’ for clients 5 “For these cases, the claimants are left with no access to justice,” Meyer wrote. “Of course, arbitrators and parties will be free to confer and make appropriate decisions when a high-risk individual is involved, but further blanket postponements of all in-person hearings is an overly rigid response to an evolving situation that leaves justice for aggrieved investors at a standstill.”But George Friedman, editor in chief and publisher of the Securities Arbitration Alert, said a backlog of 634 arbitration cases last August has been whittled to 88, according to his analysis of Finra arbitration statistics. In addition, the processing time for an arbitration case has fallen from 14.2 months at the end of 2019 to 13.5 months as of March.“One would think that if arbitration was stagnant, the backlog would be building not going down, as would processing time,” said Friedman, a former director of Finra arbitration.Meyer said Finra is the only nationwide arbitration forum that continues to lack a plan to restart in-person hearings. The American Arbitration Association will resume in-person proceedings on May 15. “We request that Finra publicize its health data criteria and thresholds used to decide whether to postpone hearings, weigh local circumstances and implement reasonable safety measures for restarting hearings,” he wrote.Finra should be more transparent about the suspension of in-person hearings, Friedman said.“Finra needs to respond [to PIABA] and show its work on how it concluded that none of its 69 hearing locations currently meet [Centers for Disease Control and Prevention] guidance for resumption of in-person activities,” Friedman said. The Gates divorce: Lessons for financial advisers For reprint and licensing requests for this article, click here,MOST READ As more people are vaccinated, Finra may resume in-person arbitration proceedings.“With the increasing availability of COVID vaccines, FINRA Dispute Resolution Services is actively reviewing conditions in its hearing locations and expects to resume in-person hearings in at least some locations in the near future,” Berry said in a statement. “The safety and well-being of parties, arbitrators, witnesses and other participants remains of paramount importance to us.” 3 1 House committee poised to advance SECURE 2.0 retirement savings bill Finra, which runs the arbitration system that adjudicates claims made by customers against brokerages and registered representatives, has allowed remote hearings if all parties agree. As of the end of March, 263 arbitration cases have conducted one or more hearings via Zoom, according to Finra arbitration statistics.But if a firm objects to a remote hearing, the claimant must petition the arbitration panel, which usually consists of three arbitrators, to allow the proceedings to occur via Zoom.The firms and reps involved in arbitration cases drag their feet because “they have no incentive to proceed with the case if they can push off a determination indefinitely,” Meyer wrote. More than one-third of claimant petitions for remote arbitration hearings are denied, he said. 2 InvestCloud to acquire Advicent and NaviPlan planning software House panel unanimously passes SECURE 2.0 Why Tony Robbins, tax shelters and financial advisers don’t mix 4 Newsletters Subscribe for original insights, commentary and analysis of the issues facing the financial advice community, from the InvestmentNews team.