The Recommendations
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Key recommendations of the Ruder task force on reforming the securities arbitration system of the National Assn. of Securities Dealers:
- Set a cap on punitive damages. The limit would be $750,000, or twice actual damages, whichever is less.
- Allow less public disclosure of customer complaints against brokers and settlements paid by them. The task force said this would encourage settlements.
- Toughen the rules on turning over evidence, which would require strict enforcement by arbitrators and automatic production of key documents.
- Allow each side to choose the arbitrators from a list, instead of panels being selected by the NASD staff.
- Recruit better-trained, high-paid arbitrators, which should encourage better-qualified people to apply.
- Scrap a “six-year eligibility” rule that bans arbitration of claims in which the alleged wrongdoing occurred more than six years ago.
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