Arbitrator Update

 

ArbitratorUpdate


 

January 2011 Issue

Table of Contents:

Arbitrator Profile: John Despriet

To Disclose Or Not To Disclose

New Amendment to NFA's Code of Arbitration

Year-end Statistics

Arbitrator Training

John Despriet

John Despriet

Each time we publish the Arbitrator Update, we write an article featuring one of our arbitrators. This time we have chosen to highlight John Despriet, an experienced arbitrator from our Atlanta roster.

Arbitrator Profile: John Despriet

John came to the U.S. as a Belgian citizen when he was a young boy. Since that time he has amassed quite an impressive Curriculum Vitae. John has more than 30 years experience in commercial litigation and is primarily involved in class actions and ancillary proceedings. In addition, John has experience in SEC enforcement proceedings, FINRA arbitrations, proxy fights and tender offers. John is one of only five attorneys in Georgia approved to defend insured officers and directors in securities class actions as panel counsel to the largest insurer of public company directors and officers in the United States.

Prior to his tour in Southeast Asia as a Captain in the Air Force, John completed his B.S. in Economics, with honors, at University of Florida. He then finished his M.B.A. from the University of Utah while stationed in Germany and concluded his formal education with a J.D., with honors, at the University of Florida. John currently practices and resides in the Atlanta area; however, he recently renewed his Belgian citizenship with hopes of retiring to Europe one day.

John is no stranger to NFA's arbitration roster. He has been an NFA Arbitrator since 1989, and unlike other arbitrators, John only serves for NFA. John got involved in commodities when he successfully tried several large cases in the early eighties. Since commodities piqued his interest, he decided to become an NFA Arbitrator when the arbitration program was formed. John stays up on industry trends by regularly studying industry publications.

John feels that he has grown in his role as an arbitrator over the years and has become more contemplative. He believes he has benefitted greatly in his role because as an advocate he has learned to see the 'other side' of the coin. As a result, John is able to see the customer's viewpoint much more easily these days.

John enjoys encountering new industry issues and learning from his fellow panelists. He finds commodity cases challenging and appreciates the opportunity to serve on them because they, "keep his brain cells going". He finds scheduling to be the most difficult aspect of the process. In his words, "I don't like it when parties and their representatives say they're not available for a year. This slows the process so much."

Rewarding is how John describes his service as an Arbitrator since it allows him to give back to his profession and the industry. He finds the greatest joy in knowing that the people who appear before him can walk away from the proceeding knowing they received a fair hearing. John's advice to new arbitrators and chairpersons is to be assertive and impose limits if necessary. Oh, and to take a trip or two to Vegas every year to keep the stress levels down!

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To Disclose Or Not To Disclose

The short answer to whether you must disclose information about relationships with parties, representatives or witnesses is always yes. You should disclose all business, family or social relationships, no matter how remote, and you should do so as early as possible.

Sections 4 of NFA's Code of Arbitration and Section 3 of the Member Rules state that each arbitrator appointed shall disclose to NFA any circumstances likely to affect impartiality, and this includes any bias or interest in the outcome of the proceeding. It also includes any past or present relationship with the parties, their representatives or their witnesses.

When you are appointed to the case, our arbitrator coordinator, Judy Jenks, will provide you with information about the parties involved so you can do an initial conflicts check. She will also provide you with the pleadings in the case and ask you to thoroughly review them for firms and individuals who, while not parties to the case, may have played a role in the dispute.

This is important because it is not uncommon for arbitrators to review the pleadings and recognize that he or she must disclose a relationship or affiliation with a non-party. Finally, if you are appointed to a case that involves an oral hearing, you will receive the parties' hearing plans. You should carefully review the witness lists and be sure to make any disclosures relevant to them.

If you believe a disclosure will affect your ability to be fair and partial, you should let NFA know and we will replace you as an arbitrator on the matter. On the other hand, if you don't believe the disclosure will affect your partiality, NFA will review the disclosure and determine if it warrants removal from the panel. Disclosures generally fall into one of three categories: automatic removal, removal if one of the parties objects to the arbitrator remaining on the panel and those that require disclosure to the parties, but do not require removal even if a party objects. NFA makes the final decision as to whether or not you may continue to serve on a case. But please remember, if NFA does remove you from a case, it does not mean we are questioning your ability to be impartial.

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New Amendment to NFA's Code of Arbitration

On October 12, 2010, Section 20 of NFA's Code of Arbitration became effective and immediately applied to customer cases pending on or after October 7. Under Section 20, when a customer (that is not an eligible contract participant) files an arbitration claim, all parties to the proceeding are prohibited from bringing a suit, legal action or proceeding outside of the arbitration, if that suit, legal action or proceeding would resolve any of the matters raised in the arbitration.

For additional information regarding the rule change, please see NFA's rule submission letter to the Commodity Futures Trading Commission:

http://www.nfa.futures.org/news/PDF/CFTC/CodeofArbSec20_0810.pdf.

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Year-end Statistics

As you may know, arbitration filings increased dramatically in 2008 and 2009. We received 225 claims in 2009, which was our highest number of filings in recent history. The filings decreased significantly, however, in 2010. NFA received a total of 138 claims in 2010 which is a 38% decrease from the prior year. However, that figure put us more in line with our pre-2007 numbers.

While new case filings were down, NFA staff closed 163 cases in 2010, which is pretty consistent with years past. 28% of those cases resulted in an oral hearing or summary proceeding, 37% of the cases settled and 35% were rejected or withdrawn.

NFA Arbitrators presided over 45 proceedings in 2010; 26 summaries and 19 oral hearings. 11 proceedings took place in California and 11 took place in Illinois. Florida and New York hosted seven proceedings each and the remaining nine took place in various states around the country.

For more statistical data, please see our website at http://www.nfa.futures.org/NFA-arbitration-mediation/arbitration-statistics.HTML.

Proceeding Locations

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Arbitrator Training

As a reminder, to remain eligible to serve as an NFA Arbitrator, you are required to complete a training program once every three years. NFA offers an online program which will help you meet this requirement. We currently offer two training modules-one which provides an overview of the entire arbitration process and which focuses on pre-hearing conference calls. This summer we anticipate rolling out a third module which will cover issues specific to panel Chairpersons. To access our training modules, please visit our website at http://www.nfa.futures.org/NFA-arbitration-mediation/online-training.HTML.
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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.

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