NASD: Difference between revisions

Revision as of 14:15, 10 March 2007

Revision as of 14:17, 10 March 2007

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The NASD operates the nation's largest arbitration forum for the resolution of disputes between customers and member firms, as well as between brokerage firm employees and their firms. The NASD makes arbitration mandatory for investors and employees, thereby denying them the right to a fair court trial.

As of June 2005, the pool of arbitrators consisted of 32,700 individuals classified as representingby the publicNASD as industry panelists and 23,700 individuals consideredclassified as non-industry panelists but still mostly sympathetic to the industry.

In 1987, in ''Shearson/American Express v. McMahon'', the Supreme Court ruled that account forms signed by customers requiring arbitration for disputes were enforceable contracts. Brokerage firms now require all customers to sign such documents, requiring binding arbitration.