COURT REPORTERS – FINRA ARBITRATION – RULE 12606

My firm recently stenographically reported a two-week FINRA arbitration in Boston.  Typically, there is no court reporter present for FINRA arbitrations.  The official record is a simple cassette tape recorder that is turned on and off by one of the arbitrators.  Attorneys who wish to have their record will hire a court reporter to create a transcript and/or give out roughs each day.

We have reported FINRA arbitrations in the past, and I had never realized that, according to FINRA rules, the court reporter is not to offer the opposing counsel access to the transcript without permission from the firm that hires the court reporter.  This rule is absolutely contradictory to what I thought I knew for sure, if a court reporter is creating a record, each party has a right to that record and can buy a copy.

FINRA Rule 12606 Record of Proceedings states:  “The Customer Code applies to claims filed on or after April 16, 2007.  In addition, the list selection provisions of the Customer Code apply to previously filed claims in which a list of arbitrators must be generated after April 16, 2007; in these cases, however, the claim will continue to be governed by the remaining provisions of the old Code unless all parties agree to proceed under the new Code.

(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 upon request for a nominal fee.

(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 and each party.  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 proceedings.  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 is 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 the Director, each arbitrator, and each other party.  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.

In my particular situation, the opposing party to the firm that hired us asked to purchase a transcript subsequent to the arbitration.  My client informed me that he would not give us permission to sell/provide the transcript to the other side.  I asked my client to cite me language that would prevent me from selling the transcript, and he sent me FINRA Rule 12606.

My attorney’s interpretation of the rule is unless the Director deems the stenographic record the official record, we are only taking notes or providing work product for the party that hired us, and we are not allowed to provide the transcript to any other parties.

As court reporters reporting FINRA arbitrations, it is wise to know Rule 12606 and educate the attorneys.

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1 reply
  1. Jan Ballman says:

    We just reported a FINRA arb yesterday wherein we were told from the outset that the tape recorder was the official record. The tape failed on Day 1, so our reporter’s notes were then deemed the official record. On Day 2 they had not yet replaced the tape recorder, so our court reporter was again designated as the official record. On Day 3 they had a new tape recorder…but no one could figure out how to get it running, so our reporter was again the official record-maker of the day. On Day 4 the attorneys had figured out how to use the tape recorder, so it immediately regained its title of the official record-maker. On Day 5, all parties decided they wanted expedited transcripts and all promptly ordered from our court reporter… including Day 4–the day we were not the official record-maker.

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