CONDUCT IN THE HEARING
At the time I acted as arbitrator, the NASD was not providing any training
on how an arbitration should be conducted nor what is the proper conduct
for an arbitrator. Within that later context is the suggested conduct by
the chairperson- and whether it be any different from the other arbitrators.
(I submit that the courses I have seen so far still do not address the
In regards to the first issue, it is necessary to relate what happened in
my first hearing and why I subsequently felt that much was remiss. During
the first break, I was admonished that I had been nodding my head or moving
my body as if to imply agreement or disagreement with the subject matter
being presented. It was suggested that I make a conscious effort not to impart
any body movement or facial expression that might indicate any acknowledgment
of any material submitted by either parties. This admonishment was bestowed
while a senior NASD staff attorney was present- and who had been present
in all the arbitration.
While I certainly understand the significance of not standing on a chair
and shouting verbal epithets against either party, I believe the arbitration
process- and most of the parties involved- are of such professional caliber
that such suggestions are infantile and degrading to both the process and
arbitrators. Further, efforts to control human responses are ill advised
and force individuals to spend time being robots. Admittedly no other arbitrators
that I ever worked with have held this position, but it may be taking place
in other arbitrations. While arbitrators do submit "blind" reviews at the
end of each session, they might be superficial since major derogatory comments
might get an arbitrator blackballed from further cases. In any case, classes
regarding arbitration procedures should be conducted beforehand.
A serious problem that does exist in many arbitrations is the fact that current
or retired attorneys or judges act as Chairpersons. While their capabilities
and background in arguing points of law are unquestionably valued and welcomed,
arbitrations are NOT courts of law and do NOT have to held- and should NOT
be held- in the same manner. Arbitrations, as defined, are not held to the
same bureauacratical and limiting standards of a court of law. Chairpersons
should/must recognize these "lowered" standards and give the arbitrators
freer rein in analyzing the case. This comment makes specific reference to
the ability of an arbitrator to ask questions during actual testimony and
Unfortunately, the arbitration rules suggest that questions regarding testimony be delayed until the examination of a witness is completed. I believe that is far too restrictive. On many an occasion, attorneys have failed to present material facts to the case- probably because their limited understanding of security application did not make such questions obvious.
And if testimony may take several hours, it is illogical to wait until it
is completed before getting answers to necessary testimony completed several
While it is true that too many disruptions and questions by arbitrators could
ruin an attorney's presentation, I submit if the arbitrator's inquiries are
expeditiously timed, they should provide more continuity and understanding
of the issues involved and a more comprehensive and knowledgeable resolution.
Arbitrator's are asked to submit blind review of the other arbitrator's conduct
an knowledge. Though there are no statistics on what percentage are deemed
competent, I submit that some arbitrators repeatedly used by the NASD and
other forum staff should be discontinued.
In one major case, a continuance was given after three days of testimony.
Upon reconvening the hearing two months later, the frequently used chairperson,
a retired judge, administered oaths and procedures as though it was a new
hearing. It was quite obvious he had not reviewed the case again, did not
know the issues before him, etc. All parties looked particularly distressed
by his actions. Before it went further, I told him it was merely a continuance.
Fortunately, his conduct during the subsequent four more days of hearing
was adequate and the parties apparently had forgotten the problem. But his
actions were potential cause for an appeal due to arbitrator incompetency.
In a separate case, a plaintiff was representing himself. While not always
the best thing to do, it is his right. Unfortunately, the chairperson, a
retired judge frequently used by the staff, told the plaintiff he was a fool
to represent himself. I admonished him never to express such comments to
either party. Opinions about business conduct is acceptable, but personal
opinions are unacceptable. Unfortunately, his commentary and conduct was
only slightly better for the rest of the hearing. The judgment was subsequently
appealed- and I submit it was due to his interference and commentary. Though
I did indicate that his attitude was improper, he nonetheless remains a
frequently used arbitrator.