12407. Removal of Arbitrator by Director
(a) Before First Hearing Session Begins
Before the first hearing session begins, the Director may remove an arbitrator for conflict of interest or bias, either upon request of a party or on the Director's own initiative.
(1) The Director will grant a party's request to remove an arbitrator if it is reasonable to infer, based on information known at the time of the request, that the arbitrator is biased, lacks impartiality, or has a direct or indirect interest in the outcome of the arbitration. The interest or bias must be definite and capable of reasonable demonstration, rather than remote or speculative. Close questions regarding challenges to an arbitrator by a customer under this rule will be resolved in favor of the customer.
(2) The Director must first notify the parties before removing an arbitrator on the Director's own initiative. The Director may not remove the arbitrator if the parties agree in writing to retain the arbitrator within five days of receiving notice of the Director's intent to remove the arbitrator.
(b) After First Hearing Session Begins
After the first hearing session begins, the Director may remove an arbitrator based only on information required to be disclosed under Rule 12405 that was not previously known by the parties. The Director may exercise this authority upon request of a party or on the Director's own initiative. Only the Director may exercise the authority under this paragraph (b).
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Amended by SR-FINRA-2015-034 eff. Dec. 20, 2015. Amended by SR-FINRA-2010-053 eff. Feb. 1, 2011. Amended by SR-FINRA-2009-003 eff. Jan. 8, 2009. Amended by SR-FINRA-2008-021 eff. Dec. 15, 2008. Adopted by SR-NASD-2003-158 eff. April 16, 2007. Selected Notice: 07-07, 08-57, 11-05, 16-04. |
- Regulatory Notice 18-22July 26, 2018
- Regulatory Notice - 11-05February 01, 2011