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  • PART VI HEARINGS; EVIDENCE; CLOSING THE RECORD

    • 12600. Required Hearings

      (a) Hearings will be held, unless:
      (1) The arbitration is administered under Rule 12800(c) or Rule 12801;
      (2) The parties agree otherwise in writing; or
      (3) The arbitration has been settled, withdrawn or dismissed.
      (b) The panel will decide the time and date of the hearing at the initial prehearing conference or otherwise in another manner.
      (c) The Director will notify the parties of the time and place at least 20 days before the hearing begins, unless the parties agree to a shorter time.
      Amended by SR-FINRA-2018-003 eff. Sept. 17, 2018.
      Amended by SR-FINRA-2008-021 eff. Dec. 15, 2008.
      Adopted by SR-NASD-2003-158 eff. April 16, 2007.

      Selected Notice: 07-07, 08-57, 18-21.

    • 12601. Postponement of Hearings

      (a) Postponement of Hearings
      (1) When a Hearing Shall Be Postponed
      A hearing shall be postponed by agreement of the parties.
      (2) When a Hearing May Be Postponed
      A hearing may be postponed:
      •  By the Director, in extraordinary circumstances;
      •  By the panel, in its own discretion; or
      •  By the panel, upon motion of a party.
      The panel may not grant a motion to postpone a hearing made within 10 days of the date that the hearing is scheduled to begin, unless the panel determines that good cause exists.
      (b) Postponement Fees
      (1) Except as otherwise provided, a postponement fee will be charged for each postponement agreed to by the parties, or granted upon request of one or more parties. The fee will equal the applicable hearing session fee under Rule 12902. The panel may allocate the fee among the party or parties that agreed to or requested the postponement. The panel may also assess part or all of any postponement fees against a party that did not request the postponement, if the panel determines that the non-requesting party caused or contributed to the need for the postponement. The panel may waive the fees.
      (2) If a postponement request is made by one or more parties within 10 days before a scheduled hearing session and granted, the party or parties making the request shall pay an additional fee of $600 per arbitrator. If more than one party requests the postponement, the arbitrators shall allocate the $600 per arbitrator fee among the requesting parties. The arbitrators may allocate all or a portion of the $600 per arbitrator fee to the non-requesting party or parties, if the arbitrators determine that the non-requesting party or parties caused or contributed to the need for the postponement. In the event that a request results in the postponement of consecutively scheduled hearing sessions, the additional fee will be assessed only for the first of the consecutively scheduled hearing sessions. In the event that an extraordinary circumstance prevents a party or parties from making a timely postponement request, arbitrators may use their discretion to waive the fee, provided verification of such circumstance is received.
      (3) No postponement fee will be charged if a hearing is postponed:
      •  Because the parties agree to submit the matter to mediation administered through FINRA, except that the parties shall pay the additional fees described in Rule 12601(b)(2) for late postponement requests;
      •  By the panel in its own discretion; or
      •  By the Director in extraordinary circumstances.
      (c) Dismissal of Arbitration Due to Multiple Postponements
      If all parties jointly request, or agree to, more than two postponements, the panel may dismiss the arbitration without prejudice.
      Amended by SR-FINRA-2015-003 eff. July 6, 2015.
      Amended by SR-FINRA-2009-075 eff. May 3, 2010.
      Amended by SR-FINRA-2008-021 eff. Dec. 15, 2008.
      Adopted by SR-NASD-2003-158 eff. April 16, 2007.

      Selected Notices: 07-07, 08-57, 10-16, 15-21.

    • 12602. Attendance at Hearings

      (a) The parties and their representatives are entitled to attend all hearings. Absent persuasive reasons to the contrary, expert witnesses should be permitted to attend all hearings.
      (b) An attorney for a non-party witness may attend a hearing while that non-party witness is testifying. Unless otherwise authorized by the panel, the attorney's role is limited to the assertion of recognized privileges, such as the attorney client and work product privileges, and the privilege against self-incrimination. The attorney must be in good standing and admitted to practice before the Supreme Court of the United States or the highest court of any state of the United States, the District of Columbia, or any commonwealth, territory, or possession of the United States, unless state law prohibits such representation.
      (c) The panel will decide who else may attend any or all of the hearings.
      Amended by SR-FINRA-2010-006 eff. Oct. 14, 2010.
      Amended by SR-FINRA-2008-021 eff. Dec. 15, 2008.
      Adopted by SR-NASD-2003-158 eff. April 16, 2007.

      Selected Notice: 07-07, 08-57, 10-40.

    • 12603. Failure to Appear

      If a party fails to appear at a hearing after having been notified of the time, date and place of the hearing, the panel may determine that the hearing may go forward, and may render an award as though all parties had been present.
      Amended by SR-FINRA-2008-021 eff. Dec. 15, 2008.
      Adopted by SR-NASD-2003-158 eff. April 16, 2007.

      Selected Notice: 07-07, 08-57.

    • 12604. Evidence

      (a) The panel will decide what evidence to admit. The panel is not required to follow state or federal rules of evidence.
      (b) Production of documents in discovery does not create a presumption that the documents are admissible at the hearing. A party may state objections to the introduction of any document as evidence at the hearing to the same extent that any other objection may be raised in arbitration.
      Amended by SR-FINRA-2008-021 eff. Dec. 15, 2008.
      Adopted by SR-NASD-2003-158 eff. April 16, 2007.

      Selected Notice: 07-07, 08-57.

    • 12605. Witness Oath

      All witnesses must testify under oath or affirmation.
      Amended by SR-FINRA-2008-021 eff. Dec. 15, 2008.
      Adopted by SR-NASD-2003-158 eff. April 16, 2007.

      Selected Notice: 07-07, 08-57.

    • 12606. Record of Proceedings

      (a) Tape, Digital, or Other Recording
      (1) Except as provided in paragraph (b), the Director will make a tape, digital, or other recording of every hearing. The Director will provide a copy of the recording to any party upon request.
      (2) The panel may order the parties to provide a transcription of the recording. If the panel orders a transcription, copies of the transcription must be provided to each arbitrator, served on each party, and filed with the Director. The panel will determine which party or parties must pay the cost of making the transcription and copies.
      (3) The recording is the official record of the proceeding, even if it is transcribed.
      (b) Stenographic Record
      (1) Any party may make a stenographic record of the hearing. Even if a stenographic record is made, the tape, digital, or other recording will be the official record of the proceeding, unless the panel determines otherwise. If the panel determines in advance that the stenographic record will be the official record, the Director will not record the hearing.
      (2) If the stenographic record is the official record of the proceeding, a copy must be provided to each arbitrator, served on each other party, and filed with the Director. The cost of making and copying the stenographic record will be borne by the party electing to make the stenographic record, unless the panel decides that one or more other parties should bear all or part of the costs.
      Amended by SR-FINRA-2016-029 eff. April 3, 2017.
      Amended by SR-FINRA-2008-021 eff. Dec. 15, 2008.
      Adopted by SR-NASD-2003-158 eff. April 16, 2007.

      Selected Notice: 07-07, 08-57, 17-03.

    • 12607. Order of Presentation of Evidence and Arguments

      Generally, the claimant shall present its case, followed by the respondent's defense. The panel has the discretion to vary the order in which the hearing is conducted, provided that each party is given a fair opportunity to present its case.
      Amended by SR-FINRA-2008-021 eff. Dec. 15, 2008.
      Adopted by SR-NASD-2003-158 eff. April 16, 2007.

      Selected Notice: 07-07, 08-57.

    • 12608. Closing the Record

      (a) The panel will decide when the record is closed. Once the record is closed, no further submissions will be accepted from any party.
      (b) In cases in which no hearing is held, the record is presumed to be closed when the Director sends the pleadings to the panel, unless the panel requests, or agrees to accept, additional submissions from any party. If so, the record is presumed to be closed when the last such submission is due.
      (c) In cases in which a hearing is held, the panel will generally close the record at the end of the last hearing session, unless the panel requests, or agrees to accept, additional submissions from any party. If so, the panel will inform the parties when the submissions are due and when the record will close.
      Amended by SR-FINRA-2008-021 eff. Dec. 15, 2008.
      Adopted by SR-NASD-2003-158 eff. April 16, 2007.

      Selected Notice: 07-07, 08-57.

    • 12609. Reopening the Record

      The panel may reopen the record on its own initiative or upon motion of any party at any time before the award is rendered, unless prohibited by applicable law.
      Amended by SR-FINRA-2008-021 eff. Dec. 15, 2008.
      Adopted by SR-NASD-2003-158 eff. April 16, 2007.

      Selected Notice: 07-07, 08-57.