Wednesday’s Word: Mediation

By Dylan Donley, Spring 2014 Graduate Research Assistant

Mediation is an informal, voluntary process in which a neutral (i.e., the mediator) chosen by both parties facilitates negotiations between the disputing parties. Unlike arbitration, mediation is not considered binding. If the parties agree to mediate, they will not give up any right to arbitrate or litigate if they are unable to agree and come to a satisfactory conclusion.

Wednesday’s Word: Neutral

By Dylan Donley, Spring 2014 Graduate Research Assistant

The term neutral as used in terms of FINRA arbitrators and mediators, refers to a mutually agreed upon impartial intermediary that has no financial, official, or personal interest in the investment dispute over which the parties are being requested to proceed. FINRA Rule 12405(a) states the type of disclosures a FINRA arbitrator must make if there are circumstances which might preclude the arbitrator from rendering an objective and impartial determination in the proceeding.

Wednesday’s Word: Arbitration

By Dylan Donley, Spring 2014 Graduate Research Assistant

Arbitration is a form of alternative dispute resolution in which consists of a hearing and the determination of a dispute or settling of differences between parties by a person or panel of people mutually agreed upon by the parties. In terms of arbitration relating to investment disputes, FINRA has a specific arbitration process by which investors are able to have their investment disputes against their brokers or dealers heard and resolved by an arbitrator or panel of arbitrators. The results of arbitration are binding on both parties.

For more information about the FINRA securities arbitration process, read more here.

Wednesday’s Word: BrokerCheck

By Dylan Donley, Spring 2014 Graduate Research Assistant

BrokerCheck is a free publicly accessible FINRA database that allows investors to research the educational and professional backgrounds of current and former brokers and brokerage firms registered by FINRA. BrokerCheck includes information such as current licensing status and history, employment history, and, if any, reported regulatory, customer dispute, criminal and other relevant matters. It is a useful tool for all potential investors to use before making any investment decisions with a particular broker or brokerage firm.

For more information about BrokerCheck, read more here and here.

Municipal Bonds – Safe Bet or Risky Proposition?

By: Timothy Guilmette, Spring 2014 Student Intern

rouletteMany long-term investors have some portion of their portfolios allocated to various types of bonds, and traditionally municipal bonds have been considered a relatively safe investment choice. After all, it’s the government we’re talking about. Unfortunately, the recession of the past decade has revealed that not all municipal bonds are created equal. In fact, the SEC has recently stepped up enforcement action against several municipalities around the country for securities violations related to misrepresentations made to investors. This post will provide some basic information on municipal bonds and provide some helpful links for investors who are thinking about investing in municipal bonds.

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Wednesday’s Word: Dealer

By Dylan Donley, Spring 2014 Graduate Research Assistant

A dealer is defined by Section 3(a)(5)of the Securities Exchange Act of 1934 as “any person engaged in the business of buying and selling securities for his own account, through a broker or otherwise…” A dealer acts as a principal in trading for its own account, as opposed to a broker who acts as an agent in executing orders on behalf of its investor clients. Like a broker, however, a dealer may be an individual or an entity.


Experienced Investor Falls Victim to Misrepresentation: What You Can Do to Avoid It

By: Patricia Uceda, Spring 2014 Student Intern

misrepAlan Grayson is one of the wealthiest members of Congress, thanks to his long record for picking winning stocks. With a net worth of $16.69 million and years of investing experience, he’s probably the last person you would think to fall victim to misrepresentation. Unfortunately that’s exactly what happened recently as he lost $18 million in a multi-million dollar investment fraud scheme run by Dean William Chapman.

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