Jeremy J. Walker v. Ameriprise Financial Services, Incorporated

The Financial Industry Regulatory Authority (“FINRA”) requires that its members (such as Ameriprise) and associated persons (such as Walker) submit their disputes to arbitration. The mandatory arbitrations are governed by FINRA’s Code of Arbitration Procedure for Industry Disputes (“Industry Code”). Industry Code Rule 13101 provides that, when a dispute is submitted to mandatory arbitration, the Code is incorporated by reference into arbitration agreement. Moreover, in Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 82, 123 S. Ct. 588 (2002), this Court held that an agreement to arbitrate “in accordance with the NASD’s ‘Code of Arbitration Procedure’” (which is the predecessor to the FINRA Industry Code) “effectively incorporated the NASD Code into the parties’ agreement.” The Second, Fourth, Eighth, Ninth, and Eleventh Circuits also have held that the FINRA code or its predecessor National Association of Securities Dealers (“NASD”) code provides the terms of a FINRA (or NASD) member’s agreement to arbitrate. Yet, in the opinion below, the Fifth Circuit held that FINRA Industry Code Rule 13504 is not a term of Walker’s and Ameriprise’s arbitration agreement. As a result, the Fifth Circuit refused to review whether FINRA arbitrators exceeded their powers under Rule

1. The questions presented are:

2. Does the FINRA Industry Code supply the terms of the arbitration agreement governing a mandatory arbitration between a member (such as Ameriprise) and associated person (such as Walker)?