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25th Edition of the Securities Arbitration Procedure Manual, D. Robbins, Published in Securities Arbitration Commentator, Spring, 2017

I am privileged to review here the 25th Edition of the Securities Arbitration Procedure Manual (“SAPM”), the preeminent work in the securities arbitration field. Authored by long-time practitioner David Robbins, the Manual updates and supplements two prior editions and the seminal work first published 25 years ago. So in short, the two volume SAPM spans development in the field of securities arbitration from 1990, three years of the Shearson v. McMahon, in which the Supreme Court affirmed the mandatory arbitration of securities claims, through 2015, the tail-end of the arbitration wave resulting from the credit crises and market declines beginning in 2008. And what a period that has been.

The manual is a synopsis of Robbins’ experience as counsel for customers, firms, brokers and his additional role as an expert and a mediator. Robbins has a keen eye for empathy. At the heart of the securities case is the trust relationship between a broker and a client, and the alleged breach of that trust, sometimes through negligence, recklessness or fraud. He notes that most customer cases of merit involve a broker’s failure to appreciate the inherent risk of a recommended security. And most cases that lack merit are those where a customer fails to take responsibility for his or her decisions or losses were due to market conditions. Getting arbitrators to empathize with your clients—be they customers, brokers or firms – is the practitioner’s primary goal. This book provides the tools to accomplish that and examines arguments that different counsel are likely to make.

At a case’s earliest stage, Robbins notes as a “central precept” that empathy is critical for the attorney representing a customer or a broker. Try this he posits:

  1. You are the one who just learned the investment was not as represented to you and you’ve lost a lot of money. You learn there is no legitimate secondary market to sell the investment or if there is, it is a shadow market populated by vulture funds ready to rip out the remaining meat from its carcass
  2. OR You are the one with a pristine Broker Check Report for decades and, for the first time, a customer arbitration has been filed against you, which could affect your business development and which you strongly believe has no merit.

So, Robbins says, the first thing we need is picture ourselves as the claimant or the broker experiencing the beginning of this adversarial process. His goal in the book is to guide you through that process.

And that he does, in extraordinary detail. Here are the 2 Volume manual’s chapters, 16 in all plus appendices and a special new pamphlet on Arbitration. The 16 chapters are: Arbitration versus Litigation; the Arbitration Agreement; A Review of the Law; Arbitrability of Securities Disputes; Case Evaluation; Attorneys, Experts and Pre-Filing Issues; Commencing Arbitration; Responsive Pleadings and Motions; Discovery; Arbitrators; Hearing Rules Explained; Hearing Presentation Techniques; Deliberation and Award; Available Relief and Effect of Awards; Industry Arbitration; and Securities Mediation and Settlements.

Each chapter has at least ten sub-sections. No details are spared or missed. Handily, there is also a reprinting of the FINRA Arbitration Code, AAA Rules, NFA Rules and the SRO Discovery Rules. Practitioners from fledgling to experienced will benefit from having the Manual in their library or on their desktop.

The first Volume of the Manual contains the law, history and development of the topic enumerated. The second Volume focuses on practice tips and the nuts and bolts of arbitration techniques, settlement and mediation. The practice tips are fulsome and helpful for all practitioners.

The Manual also contains a new Release for the 25th Edition that both updates and expands analyses of federal and state court decisions and the new FINRA arbitration rules. The practice tips include questioning brokers, questioning customers and presenting and defending selling away cases. Other subjects covered in the new edition are arbitration statistics (including a very insightful article about their importance from Rick Ryder, Editor in Chief of the Securities Arbitration Commentator), Suitability Claims for Sophisticated Business People, Investor Responsibility, Waiver of Arbitration, Non-Signatory issues; Breach of Fiduciary Duty Cases and Class Actions in Arbitration. These topics are set forth in a neutral and straightforward manner benefitting both sides of the Bar.

No review is complete without some constructive criticism. Mine are really picayune. First, the two-volume set is HUGE, to use a Trumpian adjective for a chuckle from Mr. Robbins. Thanks to the publisher there is an extensive index and helpful Special Pamphlet included in the three ring binder of materials. Second, the Mediation materials and discussion are at the very end, at which point the entire history of securities arbitration had been analyzed, reviewed and critiqued. That may have piqued a personal bias of mine — mediate early and often, so put that chapter up front.

In short, what a wonderful gift from the author. The Manual is a product of twenty-five years experience. It is noteworthy, necessary and calls for a celebration of our field. Buy it; read it; and be happy someone did this work — truly a magnum opus for the field.