Rigging the game has never been this easy.
By Pam Martens and Russ Martens of Wall Street on Parade.
Yesterday, the Public Investors Advocate Bar Association (PIABA) Foundation released a research study showing that Wall Street’s banks and brokerage firms are back to their old tricks again in gaming the private justice system that its crony self-regulator, FINRA, has carved out for the benefit of Wall Street to the detriment of Main Street.
PIABA previously exposed how FINRA, when it was called NASD, rigged the selection process for picking arbitrators so that the croniest ones kept getting selected. PIABA released this statement on July 20, 2000:
“In direct and flagrant violation of federal law, the NASD systematically evaded the Securities and Exchange Commission approved ‘Neutral List Selection System’ arbitration rule requiring arbitrators to be selected on a rotating basis. Instead, the NASD secretly programmed its computers to select some arbitrators on a seniority basis – just what the rule was designed to prevent.”
Selecting arbitrators from a limited pool of well-paid repeat players, many with ties to Wall Street, stands in stark contrast to the jury pool selection process in our nation’s courts where potential jury members are randomly selected from tens of thousands of average citizens.
PIABA had discovered the manipulation when its attorneys attempted to test the arbitrator selection system at a conference. PIABA noted in their statement at the time that “this rule violation tainted hundreds or even thousands of compulsory securities arbitrations – many still ongoing. In every such instance, the substantive rights of public investors to a neutral panel have been cynically violated,” wrote PIABA, adding that “Many public investors were thus twice cheated: first, by an NASD member firm that fraudulently conned them out of their life’s savings, and second by the NASD Arbitration Department’s rigged panels.”
This time around, brokerage units of big Wall Street banks like UBS and Citigroup are gaming the system by getting legitimate customer claims against their brokers purged from the public record known as BrokerCheck, a website where customers go to determine if they can trust a potential broker by looking at past charges against him or her…