Let me begin by expressing my great personal regard for Dean Seligman, as well as the
esteemed panel. This is a tough group to come before and call into question proposed
changes to the securities arbitration process conducted by the National Association
of Securities Dealers, Inc. (“NASD”) and the other self-regulatory organizations,
especially since Joel asked that we keep our remarks brief. Yet, I will not despair
in the face of such overwhelming adversity. After all, I know something about
securities arbitration. In a past life, I served on between five and ten New York
Stock Exchange (“NYSE”) panels pitting customers against their brokers and firms.
Customers, brokers, and firms won some and lost some on my panels. We did not award
any punitive damages. The customers generally had honorable complaints and asserted
them well. The brokers and firms also generally acquitted themselves in an honorable
and professional manner. I believe that justice was served by those panels. Even if
you could prove to me today that we were not right on a particular claim, I would
continue to believe that all parties had a fair chance to be heard by an impartial
panel. I am proud of my service.
It is not surprising therefore that I support arbitration for customer complaints.
No doubt the process could be improved, and many of the Task Force’s recommendations
would do just that. Nevertheless, I will focus on two issues where I may disagree
with my fellow panelists: (1) the merits of a proposed punitive damages cap, and (2)
the appropriateness of mandatory arbitration for employment discrimination claims.