September 27, 2021

Volume XI, Number 270

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September 24, 2021

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FINRA Files Proposed Revised Discovery Guide with SEC

On July 12, FINRA filed a new Discovery Guide with regard to FINRA arbitrations for approval by the SEC. The Guide provides guidance to parties on which documents parties should exchange without arbitrator or staff intervention, and to arbitrators in determining which documents customers and member firms or associated persons are presumptively required to produce in customer arbitrations. This new Discovery Guide will replace the existing Guide, which was approved by the SEC in 1999. The process of updating the Guide has been an ongoing undertaking in one form or another since 2004.

The revisions to the Guide include: 1) substantive changes to the Guide's introduction; 2) changes in the list of documents the firm or associated person shall be required to produce in all customer cases; and 3) changes in the list of documents the customer will be required to produce in all customer cases.

An example of a substantive change in the introduction of the Guide is an expansion of the discussion on confidentiality to include a statement relating to the burden of establishing that documents require confidential treatment. This statement enumerates factors that arbitrators should consider when deciding questions about confidentiality. The factors include:

  • Whether the disclosure would constitute an unwarranted invasion of personal privacy (e.g., an individual's social security number, or medical information);
  • Whether there is a threat of harm attendant to disclosure of the information;
  • Whether the information contains proprietary confidential business plans and procedures or trade secrets;
  • Whether the information has previously been published or produced without confidentiality or is already in the public domain;
  • Whether an excessively broad confidentiality order could be against the public interest or could otherwise impede the interests of justice; and
  • Whether there are legal or ethical issues which might be raised by excessive restrictions on the parties.

A complete copy of the revised Discovery Guide can be found here.

 

From Cosgrove Law's Securities and Investment Blog located at:

http://securitiesandinvestmentblog.blogspot.com/2010/07/finra-files-prop...

Copyright © 2021 Cosgrove Law, LLC.National Law Review, Volume , Number 204
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About this Author

David Cosgrove, Managing Partner, Financial and regulatory lawyer, Cosgrove Law Group
Managing Partner

Mr. Cosgrove represents financial professionals and entities throughout the nation.  He has obtained over $8 million in Awards and settlements for his adviser clients in U-5/tortious interference cases in just the last 7 years.  He also assists advisers and broker-dealers with regulatory inquiries, investigations, and audits.  Beyond the financial industry, he is an award winning trial attorney with a focus on commercial, defamation, and serious injury litigation.

Some of these results include:

  • Obtained over $3.3 million for an investment adviser and...
(314) 563-2492
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