*Letters

Proposals Relating to Punitive Damages in Arbitration

Published on:
December 23, 1997

The Securities Industry Association (SIA)* provides comments to the Securities and Exchange Commission (SEC) on the proposed rule changes relating to punitive damages in arbitration, File No. SR-NASD-97-47.  Specifically, the proposed rule, among other things, limits the amount of a  punitive damages award in NASD arbitration to the lesser of twice compensatory damages or $750,000.  SIA lends its support to the proposed rule, even though the proposal rejects the SIA’s primary submission that punitive damages ought not to be made available at all in securities arbitration.  The proposed rule is an improvement because it will preserve the numerous benefits associated with securities arbitration and will allow proceedings to remain a fair, efficient, and economical means of dispute resolution.

*SIFMA is the product of a merger between the Securities Industry Association (SIA) and The Bond Market Association (TBMA) in 2006.

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