Are there any special considerations for securities arbitration?
Yes, there are special considerations for securities arbitration in California. Securities arbitration is different from other kinds of arbitration because it involves disputes between an individual investor and a company or a broker-dealer. Conflict of interest and expertise are two key considerations. First, there is an inherent conflict of interest when it comes to securities arbitration. This is because the parties to the dispute are on opposite sides of the table and the arbitrator is responsible for deciding the outcome. That’s why arbitrators must be impartial and independent. Furthermore, California law requires the arbitrator to show no partiality to either party. Second, it’s important that an arbitrator have the necessary legal and financial knowledge to properly assess the case. Arbitrators in securities disputes should have a deep understanding of securities laws and regulations, as well as financial markets. California requires that all securities arbitrators be registered with the Department of Corporations and have experience in the securities field. Ultimately, it’s important that both parties trust that the arbitrator is fair and knowledgeable in order for the arbitration process to work. By taking these considerations into account, California has created a system to ensure that securities arbitration can be successful.
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