Arbitrator Update

 

ArbitratorUpdate


 

July 2012 Issue

Table of Contents:

Arbitrator Profile: Lanny Leff

Let's Put Some Order in That Order

Costs and Fees Please

Show Me the Money

Glad You Asked

We Haven't Forgotten You

Lanny Leff

Lanny Leff

Arbitrator Profile: Lanny Leff

Lanny Leff finds the things he likes in life and sticks with them. He worked for the same firm for 45 years and has been an NFA arbitrator for 24 years. More importantly, however, he has been married to his wife Carol for almost 38 years, and together they have a lovely family that includes two grown children and a beautiful granddaughter.

Lanny started at Bache & Co. (later Prudential Securities and Wachovia) in November of 1961 as a Registered Representative. He was subsequently promoted to Branch Manager and then First Vice-President. In 1988, during the infancy of NFA's arbitration program, Lanny became an arbitrator. Back then, arbitrators were not compensated for their time, yet Lanny never minded. He served willingly because he enjoyed giving back to the industry that had served him so well. As he put it, "It was nice when we started getting paid, but it was never the reason I did it." In Lanny's mind, the arbitration process provides a huge cost savings to the customer and, "That's what matters most."

Upon gaining experience with NFA, Lanny became an arbitrator for the NYSE and NASD (now FINRA). Lanny enjoys serving as an arbitrator and speaks well of all of the programs. As a Member arbitrator, Lanny believes it is important to have an industry professional on each arbitration panel since, in his opinion, industry insiders provide valuable knowledge and insight that non-Members may not have.

In 2009, after a long, successful career in the financial industry, Lanny retired to sunny Arizona. In Arizona, he enjoys the occasional ride on his Harley Davidson Screaming Eagle Ultra and caps off a perfect day with a fine cigar and good glass of wine. Given his service to the industry, we think he deserves it!

Return to Top


Let's Put Some Order in That Order

NFA staff recognizes that NFA arbitrators do all the heavy lifting when it comes to deciding motions. Lately, NFA has seen an increase in complex discovery motions, and as a result, some of our panels have taken steps to try to streamline the discovery process. Here are a few examples of how they've been able to accomplish that, which we think worked well and therefore may be helpful to you:

  • When the issue of attorney-client privilege arises, if the panel feels it's appropriate, you can ask the parties to produce a privilege log to help you rule on certain items.

  • When parties disagree as to the existence of certain documents, the panel can require the party against whom the motion to compel is sought, to attest to the fact that it has performed a full and thorough search for the documents in question and has produced all responsive documents in its possession, custody or control.

These requests can be made through an order, which is where NFA staff comes in. Staff's role is to take the panel's request (or decision), format it, and circulate a draft to ensure it properly reflects the panel's wishes. When relaying a decision to staff, remember, you do not need to explain the panel's decision because NFA does not issue reasoned orders (or awards). Also, let the case administrator know how long the parties have to comply with the order. Specific dates are best, but you may also choose to have the parties comply within a specified number of days, from either the date of the order or the date the order is served.

As always, if you are actively serving on a case and you have questions on the topic of motions or orders, you may contact your case administrator for more specific guidance.

Return to Top


Costs and Fees Please

As you may know, Section 10(b) of NFA's Code of Arbitration (Code) and Member Arbitration Rules (Rules) provides that an award may include an assessment of interest, costs or fees. However, before a panel can award costs or fees to any party, it must ensure a valid basis exists for doing so. (This does not include reimbursement of hearing and filing fees since Section 11(a) of the Code and Rules allows the panel to assess those fees against any party or divide them among all parties.)

Section 12 of the Code and Rules governs the issue of costs and fees and states that a panel may assess against a party the reasonable and necessary expenses incurred by any party, including attorneys' fees, upon finding that such party's claim or defense was frivolous or was made in bad faith, or that the party engaged in willful acts of bad faith during the arbitration. It further states that attorneys' fees may also be awarded provided a statutory or contractual basis exists for doing so. In NFA's forum, these are the only bases upon which an award of costs or fees can be made. As arbitrators, you'll need to keep this in mind when considering whether an award of costs or fees is appropriate.

In some cases, the requesting party will provide an accounting of the costs or fees incurred. If they do not, however, the panel should contact the case administrator who will prepare an order which requests the information for you.

Return to Top

Show Me the Money

NFA recognizes that your willingness to serve as an arbitrator is an important contribution to the success of our program and we appreciate the time and effort you put forth in serving. As a token of our appreciation, we provide you with an honorarium for performing certain functions.

NFA arbitrators receive $125 for participating in a summary proceeding, $200 for conducting a half-day oral hearing or participating in a pre-hearing conference call with the parties, and $400 for conducting a full-day oral hearing. In addition, the panel chairperson receives a $75 daily honorarium for facilitating the hearing and conducting the pre-hearing call.

Panelists also receive $125 for deciding motions filed after a certain date (i.e. more than 80 days after the last pleading is due in a summary proceeding and more than 100 days after the last pleading is due in a case that will be decided through an oral hearing). We do not, however, compensate panelists for holding teleconferences among themselves, nor do we compensate panelists for time spent reviewing the parties' pleadings or other submissions.

In addition to compensating arbitrators for their time, NFA reimburses panelists for expenses incurred as a result of attending the hearing. These expenses include cab fare, parking and gas mileage. Please be sure to save your receipts and provide them to your case administrator at the conclusion of the hearing so NFA can reimburse you.

NFA is unable to reimburse arbitrators for hotels, rental cars, and other expenses incurred in connection with an overnight stay, unless it was approved at the time of your appointment. Therefore, if you feel your commute to the hearing location would require an overnight stay, you must communicate that to our arbitrator coordinator, Judy Jenks, when she asks you to serve.

Return to Top

Glad You Asked

At times we are asked, "Why do we have to complete the Classify tab on the arbitrator profile each time we serve?" The answer is simple. When a customer files a claim, he is asked to specify whether he wants a Member or non-Member panel to hear his claim. Therefore, each time NFA is considering whether you would make a good fit for a particular case, we need to determine whether you are classified as a Member or non-Member panelist since that will directly impact whether you can serve. We must ask each time, since your classification can change frequently.

In general, NFA defines a Member arbitrator as an individual who is, or was within the past three years, an NFA Member, an employee of an NFA Member, an Associate Member, or a CFTC registrant. In addition, a Member arbitrator is an attorney, accountant, auditor or professional consultant who has performed a significant amount of work on behalf of NFA Members, Associates or CFTC registrants within the past 12 months. Furthermore, given the close affiliation between the futures and securities industries, NFA has also included in the definition of Member individuals who are employed by securities or investment related entities. Finally, individuals who have trading privileges on a financial exchange and relatives of futures or securities industry professionals are also classified as Members. All other individuals are classified as non-Member arbitrators.

As you can see, the definition of Member arbitrator is very broad. Since the Member and non-Member classification does impact panel selection, NFA must choose its panelists carefully and evaluate each arbitrator's classification each time he or she serves.

Return to Top

We Haven't Forgotten You

Perhaps you're wondering why you haven't been called on to serve lately. It's not that we've forgotten you. Rather, it's likely due to the fact that claims are down drastically. Please visit NFA's website for statistical data on NFA arbitration filings.

Return to Top

Complete Arbitrator Profile

Arbitrators can complete and update their profile online.

Complete or Update Profile

Arbitrator Training

NFA offers online training to help arbitrators meet their mandatory training requirements and understand their responsibilities as an NFA Arbitrator.

Arbitrator Training 

Search the Code of Arbitration or Member Arbitration Rules

You can search the Code of Arbitration and Member Arbitration Rules by section, Rule number and/or keywords.

Search OR View the entire Manual.
 
NFA is the premier independent provider of efficient and innovative regulatory programs that safeguard the integrity of the futures markets.
Site Index | Contact NFA | News Center | FAQs | Career Opportunities | Industry Links | Home
© National Futures Association All Rights Reserved. | Disclaimer and Privacy Policy