Adversarial Failure

78 Pages Posted: 8 Jul 2020 Last revised: 26 Aug 2020

See all articles by Benjamin Edwards

Benjamin Edwards

University of Nevada, William S. Boyd School of Law

Date Written: June 8, 2020

Abstract

Investors, industry firms, and regulators all rely on vital public records to assess risk and evaluate securities industry personnel. Despite the information’s importance, an arbitration-facilitated expungement process now regularly deletes these public records. Often, these arbitrations recommend that public information be deleted without any true adversary ever providing any critical scrutiny to the requests. In essence, poorly informed arbitrators facilitate removing public information out of public databases. Interventions aimed at surfacing information may yield better informed decisions. Although similar problems have emerged in other contexts when adversarial systems break down, the expungement process to purge information about financial professionals provides a unique case study.

Multiple interventions may combine to more effectively surface information and generate better informed decisions. In quasi-ex-parte proceedings, traditional attorney ethics rules must yield to a higher duty of candor. Yet adjudicators should not rely on duty alone. Adversarial scrutiny may emerge by designating an advocate to independently and critically engage in circumstances where no party has any real incentive to oppose an outcome. Ultimately, addressing adversarial failures may require a shift away from adversarial adjudication to a more regulatory framework.

Keywords: Securities Arbitration, Securities, Expungement, FINRA, Self-Regulatory Organizations, SROs, SEC, Stockbroker, Broker

Suggested Citation

Edwards, Benjamin, Adversarial Failure (June 8, 2020). Washington and Lee Law Review, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3622730 or http://dx.doi.org/10.2139/ssrn.3622730

Benjamin Edwards (Contact Author)

University of Nevada, William S. Boyd School of Law ( email )

4505 South Maryland Parkway
Box 451003
Las Vegas, NV 89154
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
47
Abstract Views
399
PlumX Metrics