Unfortunately for me, the answer to that question is all too often in the affirmative. After having physicians with no securities background and unconscious (literally) individuals serve as arbitrators, I have scratched my head and pondered why FINRA uses these people as arbitrators.
In one instance, it got so bad that the chair agreed to elbow one of his panel members to prompt him to stay awake, but this was only after the parties complained to FINRA itself. The sleepy panel member claimed that we were not hearing him snore; instead, he was just listening intently with his eyes shut. Fortunately, the parties settled the case before an award, which would have likely been subject to appeal due to "Sleepy" serving on the panel.
It finally appears as though FINRA is revisiting its vetting process after a recent award was vacated on appeal because one of the arbitrators was indicted during the case. Needless to say, the judge who vacated the award called into question the integrity of the arbitrator selection process.
For those of us on both sides of the aisle, we want a well-informed and experienced panel. If FINRA wants its members to use the arbitration process, then FINRA has to put its money where its mouth is and do a better job at vetting those who serve as arbitrators. Otherwise, a process that is already subject to ridicule, will only lose more and more integrity and be questioned by the firms and customers who rely on arbitration to adjudicate their disputes.
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