FINRA notified member firms that the SEC approved a proposal to amend FINRA Rule 12504 of the Code of Arbitration Procedure for Customer Disputes and FINRA Rule 13504 of the Code of Arbitration Procedure for Industry Disputes. The final amendments provide that arbitrators may act on a motion to dismiss a party or claim before the conclusion of a party's case in chief, if the arbitrators determine that (i) the non-moving party previously brought a claim regarding the same dispute against the same party, and (ii) the dispute was fully and finally adjudicated on the merits and memorialized in an order, judgment, award or decision.
The amendments empower arbitrators to grant a motion to dismiss a particular claim if an arbitrator believes the matter was adjudicated thoroughly, including in cases in which a claimant adds a new cause of action or additional facts, as long as the moving party establishes that the non-moving party brought the same dispute against the same party and that the non-moving party had ample opportunity to present its claims in the earlier proceeding.
The final amendments will become effective on motions to dismiss filed on or after January 23, 2017.
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