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Can FINRA Arbitrations be Conducted Remotely by Live Video or Online?

Many clients are asking, “can my arbitration hearing be done online by video?” The answer is yes.  FINRA allows for remote hearing services, via Zoom and teleconference, to parties in all cases.  In arbitration, all parties can agree as to almost anything and FINRA will allow it – such as who the arbitrators are, methods of picking arbitrators and/or how the hearing will happen.  The trick is to get your adversary to agree to alternative hearing methods or to get a sitting arbitration panel to order (force) your adversary to do it. A hearing can happen a number of ways with FINRA’s blessing, so long as it can be recorded.  Next week, we expect that FINRA will set out more formal guidelines and we will update this blog in a new post.

Zoom is a user-friendly video platform that provides high-quality and secure options for conducting remote hearings.  The platform allows parties, arbitrators, counsel, and witnesses to share documents and their screens with other participants.  Zoom is a viable option for parties unable to attend an in-person hearing. Malecki Law’s FINRA arbitration attorneys have experience and systems in place, ready to use this method for hearings in investor arbitrations, as well as industry employment and regulatory matters.  For many years, remote witnesses have participated and testified via video and telephonic methods.  It is really not a completely new concept.

Whether the hearing is remote or in-person, the prehearing process will not be hindered.  In customer dispute cases, where customers bring claims against their broker and/or broker-dealer, all aspects, except for an in-person hearing, are done remotely (such as filing the claims, resolving discovery disputes, and interviewing witnesses).  As a matter of fact, most claims against a broker and/or broker-dealer will settle before the hearing is scheduled to begin.

Although remote hearings have long been an option, in response to COVID-19, FINRA has postponed all in-person hearings, making them necessary in some cases.  With Zoom as an option, hearings can continue through such challenging times.  There are two different ways to schedule a remote hearing.  The first is by party agreement.  In customer disputes, this means both the customer and the broker and/or broker-dealer must agree to hold the hearing virtually.  However, defense counsel might be unwilling to agree to a virtual hearing because they may be unfamiliar with the Zoom platform; it is also a way for them to attempt to delay the case – which we vehemently fight against.  In such cases, a party can use the second option, which is to make a motion to the arbitration panel for a virtual hearing.  And, if the panel grants the motion, the hearing will be held remotely regardless of the broker and/or broker-dealer’s opposition.

Although there may be a few challenges with holding a hearing virtually, these challenges can be minimized, if not eradicated, with proper preparation and protections.  For example, FINRA scripts need to be altered to address people not reading from documents when testifying.  Should the case proceed to hearing, the securities fraud lawyers of Malecki Law will help eliminate these challenges, and ensure clients are comfortable and feel confident throughout the hearing.  This includes helping clients become familiar with Zoom, demonstrating some functions of the platform, and practicing presentation skills through video.  Zoom is easy to use and even children have begun using it for education during the COVID-19 quarantine period.  Moreover, the Zoom features that a customer will use during the virtual hearing are minimal, and consist of logging on to Zoom and using the mute option when not speaking.  These features are easy to learn, and only take the click of a mouse.  Further, FINRA staff is available to provide technical support for the virtual hearing.

Due to its user-friendly features, other arbitration and mediation forums in which Malecki Law arbitration attorneys practice use such videoconference platforms as a means to conduct remote hearings.  Videoconferences are tools that the JAMS (Judicial Arbitration & Mediation) forum has “long used to successfully resolve thousands of disputes of all kinds.”  Similarly, the AAA  (American Arbitration Association) forum has stated that video platforms provide “a full and equal opportunity for all parties to present evidence in a hearing.”  And the NAM (National Arbitration and Mediation) forum has stated that its Zoom platform has been “successfully and repeatedly used, without incident.”  Even courts have made a shift and have begun to resolve matters by videoconference that were originally only resolved in person before the COVID-19 pandemic.

Deciding to hold a hearing virtually through FINRA’s Zoom-supported arbitrations is an excellent option for those unable to have an in-person hearing.  For more information regarding remote hearings, feel free to contact the New York securities fraud lawyers of Malecki Law.  You can also learn more about FINRA’s remote hearings at https://www.finra.org/rules-guidance/key-topics/covid-19/hearings/zoom-arb-med.

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