FINRA Extends General Postponement of In-Person Arbitration and Mediation Hearings, Provides Stats on Use of Remote Hearings

Due to the COVID-19 pandemic, FINRA has extended the postponement of all in-person arbitration and mediation hearings scheduled through January 1, 2021. However, if all parties and arbitrators agree to proceed in-person based on their own assessment of public health conditions, and applicable state and local orders allow, a case may proceed with an in-person hearing provided that the participants comply with state and local orders related to the COVID-19 pandemic.

To read the full text of this Duane Morris Alert, please visit the firm website.

FINRA Extends Postponement of In-Person Arbitration and Mediation Hearings

By Walter Saurack and James Regan

Due to the COVID-19 epidemic, FINRA has extended the postponement of all in-person arbitration and mediation hearings scheduled through September 4, 2020.  Parties may opt to proceed telephonically or by Zoom or panels may order that that the hearings will take place telephonically or by Zoom.  Hearing postponement will not affect other case deadlines. All case deadlines will continue to apply and must be timely met unless the parties jointly agree otherwise.  FINRA staff will contact affected parties to reschedule or discuss remote scheduling options.

FINRA will also waive postponement fees if parties who have an in-person hearing scheduled from September 7 through December 31, 2020 stipulate to adjourn that hearing.  To avoid postponement fees, parties must provide written notice of the stipulation to adjourn more than 20 days prior to the first scheduled hearing date.

FINRA Now Offering COVID-19 Reduced Fee Mediation Program

In response to the COVID-19 pandemic, FINRA’s mediation department has announced a reduced fee remote mediation program available through August 31, 2020. In this program, parties will choose from a randomly generated list of 10 national mediators. The mediator fee is $100 per hour split between the parties, and FINRA mediation filing fees and administrative fees are waived.

FINRA also offers virtual hearing services (via Zoom and teleconference) to parties in all cases by joint agreement of parties and mediator.

Read more about FINRA and the pandemic in our April 9 and May 26 Alerts.

Beware of Pitfalls in Remote FINRA Hearings

Due to COVID-19, FINRA has postponed all in-person arbitration and mediation hearings through July 31, 2020, and is offering remote hearing services using Zoom and teleconference. Parties considering a remote hearing should consider the pitfalls of such hearings―particularly that they may be an inadequate substitute for an in-person hearing or that they will provide another ground on which decisions may be challenged.

To read the full text of this Duane Morris Alert, please visit the firm website.

Federal Prosecutors Begin Charging COVID-19 Fraud in California and New Jersey

By Jovalin Dedaj

Yesterday, federal prosecutors in the District of New Jersey charged a Georgia man for his alleged role in a conspiracy to defraud federally funded and private health care benefit programs by submitting fraudulent testing claims for COVID-19 and genetic cancer screenings.   It follows a criminal complaint announced last week by the U.S. Attorney’s Office for the Central District of California against a Southern California man on a federal fraud charge alleging he solicited investments in a company he claimed would be used to market pills that would prevent coronavirus infections and an injectable cure for those already suffering from COVID-19.  These cases are among the first criminal actions in the ongoing public health crisis and come on the heels of the first civil enforcement action by the Department of Justice against a COVID-19 related fraud.

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SEC and FINRA Warn Against COVID-19 Insider Trading and Market Fraud

By Jovalin Dedaj

On March 23, 2020, the Securities and Exchange Commission issued a stern warning against trading on nonpublic information related to the COVID-19 pandemic.  In a joint statement from the SEC’s co-directors of enforcement, the SEC emphasized that “a greater number of people may have access to material nonpublic information than in less challenging times.”  The message makes clear that corporate controls and procedures remain paramount in these challenging times.  But, with this announcement, the SEC is also putting the investing public on notice that it recognizes “these dynamic circumstances” present a greater risk of violating the federal securities laws.

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