How do I Prepare for a Hearing?
Your lawyer will prepare you for the hearing and should go over with you the direct examination questions, as well as any anticipated cross-examination questions. Your lawyer should practice going over these questions with you. The nature of the questions will be governed by the facts of the case, as well as the documentation produced in the case. Preparation includes arranging for witnesses and to be available for presentation to the arbitrators at the hearing. Your lawyer should counsel you on what to wear and how to act.
It is critical to discover all necessary documents to be adequately prepared for the arbitration hearing. FINRA rules require the parties to cooperate in the voluntary exchange of documents and information to expedite the arbitration. Not long ago, FINRA came up with a set of documents that are presumptively discoverable and that each party must produce within a certain timeframe. I am amazed at how often brokerage firms object to producing some of this documentation in the face of FINRA making clear that such documentation is discoverable based on the standard lists.
Parties are also allowed to ask additional requests for documentation. FINRA rules require that any request for documents or other information should be specific, relate to the matter in controversy, and afford the party to whom the request is made a reasonable period of time to respond without interfering with the time set for the hearing. Document production and information exchange is to be accomplished within the time set forth in the Uniform Code.
A prehearing conference will be scheduled early in the process. The Director of Arbitration will set the time and place of a prehearing conference and appoint either a staff person or an arbitrator to preside. The prehearing conference is almost always held by telephone. Under the rules, there are time tables for parties either to produce requested information or to object to the production requests. If a prehearing conference without an arbitrator does not resolve the outstanding issues, those information-request disputes or issues will be referred to a single arbitrator, the Chairman.
Occasionally, there is need to subpoena a third party for documents in a securities arbitration. This usually arises when phone records are needed from a phone company or brokerage account statements from a third-party brokerage firm. The reach of subpoenas for documents is much broader than it is for requiring the appearance and testimony of a witness. The arbitration panel has no authority to require the attendance of witnesses at an arbitration hearing; it’s only authority is to compel the attendance of FINRA licensed individuals. If I have a case where I have named the brokerage firm as the sole Respondent and the broker at issue has changed firms, I may need to arrange for that broker to be subpoenaed if I want him at the arbitration.
One of the most significant deadlines in every securities arbitration is what is known as the 20-day deadline. This is the date – 20 days prior to the arbitration hearing – that each party serves on each other copies of documents (including graphs, charts, and recordings) they intend to present at the hearing and identifies witnesses they intend to present at the hearing. This is when I learn who the opposing expert is and what documents the opposition intends to introduce that I may not have seen before.
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