The FINRA referees have an important job. They do justice to investors, financial advisers, employees and all types of businesses on Wall Street. For most of the people and entities they make decisions about, they are the only forum in which their important legal dispute can be resolved. Arbitrators have the same authority, power and awesome responsibility as a judge and jury.
I have long argued that FINRA referees deserve to be better paid for their important work. On April 15, 2021, FINRA increased the amount of chairs paid (during the trial) for a full day of trial to $ 1,100. The rest of the panel only earn $ 600 per day. (FINRA 12214 (a)).
This compensation does not include the time that the arbitrators spend traveling, reviewing pre-hearing discussions, pre-hearing and post-hearing briefs, deliberating after the trial, drafting their award, to communicate with FINRA and other ancillary work. When you factor in this extra work, non-presiding arbitrators earn about $ 60 per hour for service before, during, and after the trial.
The last time FINRA increased hearing fees for non-presiding arbitrators was on December 15, 2014.
Since then, inflation and what other arbitrators charge the AAA and other private arbitration firms have increased dramatically. However, there has been no corresponding increase in the remuneration of FINRA arbitrators.
I have arbitrated with the AAA, JAMS and other private arbitration firms. I have yet to meet a non-FINRA arbitrator who charges less than $ 300 per hour.
FINRA arbitrators are highly qualified
Referees at AAA and elsewhere are no more dedicated, more experienced or smarter than referees at FINRA. Indeed, given that many FINRA referees have acquired extensive experience in the financial industry prior to becoming an arbitrator and operate a regular FINRA arbitration regime, FINRA arbitrators are more familiar with the financial industry in general, and with client and industry disputes in particular.
There is no logical reason why highly qualified FINRA arbitrators – who have more experience in the financial industry than other arbitrators – should be paid ten times less than their counterparts elsewhere.
Interestingly, FINRA charges an additional filing administrative fee and “forum fee” ranging from $ 600 to $ 1,575 per day at trial, which is much higher than what other private arbitration entities charge. . It’s strange that FINRA charges litigants four to five times more than what other private arbitration entities charge, and FINRA apparently pockets the money, instead of passing it on to frequent arbitrators in the form of a higher salary.
Since FINRA arbitrators can earn 10-15 times more by arbitrating for AAA and other private arbitration firms, many high-quality FINRA arbitrators have stopped running FINRA arbitrations and are taking their services elsewhere. This migration of high-quality FINRA arbitrators has accelerated as the gap between what FINRA arbitrators can do at FINRA and elsewhere has grown significantly.
As the old saying goes, “You get what you pay for. »The time has come for FINRA to award The FINRA referees for their experience and dedication with a substantial salary increase of at least $ 250 per hour.
Ridiculous salary of FINRA referees
- President: $ 1,100 / day for the trial
- Other panelists: $ 600 / day for the trial
- Fixed fee for queries: $ 200
- Fixed fee for subpoenas: $ 200
- Travel time, preparation for the trial, reading of the briefs before and after the trial and deliberation: NO PAY
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