Contact: Brian N. Smiley, President
Smiley Bishop & Porter, LLP
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Suite 1250
Atlanta, Georgia 30338
Tel. (770) 829-3850
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bnsmiley@sbpllplaw.com


PIABA PETITIONS THE SEC TO REMOVE THE MANDATORY SECURITIES INDUSTRY ARBITRATOR FROM ALL ARBITRATION PROCEEDINGS INVOLVING PUBLIC INVESTORS AND TO RESTORE INVESTOR CHOICE

Thursday, June 16, 2009 (Norman, OK) - The Public Investors Arbitration Bar Association ("PIABA") has directly submitted a rule change petition to the U.S. Securities & Exchange Commission ("SEC") that would provide all investors with the choice of whether to have an securities industry representative sit as an arbitrator on all customer-initiated arbitration proceedings that are administered by the Financial Industry Regulatory Authority (“FINRA”).1

Under the current Code of Arbitration Procedure at FINRA, all arbitration claims that are initiated by public investors against the securities industry, in which the amount in controversy exceeds $100,000, are required to be decided by a panel of three arbitrators - one of which must be affiliated with the securities industry.

“Forcing investors who believe they have been wronged by the securities industry to have their claims decided by panels of arbitrators that must include a representative of the securities industry creates an appearance of bias, if not actual bias, and denies investors of their fundamental right to choice which has been the bedrock of the American legal system for centuries” according to Brian Smiley, President of PIABA and a partner in the Atlanta, Georgia law firm of Smiley Bishop & Porter LLP.

The securities industry, according to Smiley, “requires virtually every investor who desires to participate in our financial markets to agree to arbitrate their claims before FINRA Dispute Resolution when they open their investment accounts. As a result, the doors to our federal and state court systems, along with other arbitration forums, have been slammed shut on investors forcing them into a forum that does not allow for full discovery and where the outcomes are potentially influenced by securities industry members.”

As opposed to the current system which forces public investors to accept an arbitrator with securities industry ties to decide their claims, the PIABA Rule Petition would allow an investor to chose whether a securities industry arbitrator would sit on their case. The PIABA Rule Petition would essentially mirror the voluntary pilot program that was initiated by FINRA, on a limited basis, in October 2008 with respect to the industry arbitrator.2

“The PIABA Rule Petition would be a significant improvement to the current system and reduce the inequities and perception of bias that are now so prevalent in the FINRA arbitration forum,” states Smiley.

With President Obama’s recently expressed concern about the fairness of securities arbitration and a record number of public investors now filing arbitration claims with FINRA - due, in significant part, to the abuses and systemic violations of trust that have been the hallmark of Wall Street’s practices over the past few years - the principles that are encompassed within the PIABA Rule Petition would “further investor protection and choice at a time when many public investors have suffered unnecessary and unwarranted losses to their life savings” adds Smiley.

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The Public Investors Arbitration Bar Association ("PIABA"), established in 1990, is an international bar association of attorneys whose mission is to promote the interests of the public investor in securities and commodities arbitration by protecting public investors from abuses in the arbitration process; making securities and commodities arbitration as just and fair as systematically possible; and creating a level playing field for the public investor in all securities and commodities arbitration forums.

1 Please find the Rule Petition in its entirety at PIABA.org

2 The FINRA press release regarding the public arbitrator program may be found at http://www.finra.org/Newsroom/NewsReleases/2008/P038958