The Pantagraph from Bloomington, Illinois • Page 48

The Pantagraph Sunday, May 11, 1997 SECURITIES ABUSE: Arbitration process often more traumatic than actual loss zzzz 1 Jane Bryant ftfv Quinn order of preference. If a panel couldn't be created from this list, the NASD would appoint one. That worries the consumer lawyers, who don't want the NASD to have any discretion over who's on the panel. That wouldn't happen, says Linda Fienberg, the NASD's chief hearing officer. The people appointed would be the following three on the list, so no preference could be shown.

The rule doesn't say that, however, so who knows? Fienberg says this crucial point will be included with the filings when the rule is submitted for approval to the Securities and Exchange Commission (SEC). When the SEC gets the rule, it will be put out for public comment. I'll let you know when that time comes. Next time: Can you be your own lawyer? sociation (PIABA, 888-621-7484), whose members take consumer cases. Although many fair-minded people serve as arbitrators, the panels are often perceived as tilting toward industry in part because the industry largely picks who's on them.

Shockman says she has presented cases before arbitrators so bad that "we walked into the room every day in a cloud of bias." A Massachusetts stockbroker and arbitrator, who doesn't want to be identified, says he knows arbitrators who deliberately try to limit customer awards so the industry will keep asking them to serve. Two particular arbitrators, he says, "act as if they're in kangaroo courts and want to find for the brokerage firm. If they do, the industry will want them on more cases." To reform this process, NASD would maintain a list of potential arbitrators. When a case came up, the NASD would give the parties the next 15 names on the list. The parties could strike as many as they want and rank the rest in tells its story, offers evidence and presents witnesses.

Several months later, the NASD announces the decision, without explaining why the panel reached that conclusion. In most cases, you cannot appeal. Arbitration panels, by the way, can and do ignore sections of the securities laws that were written to protect consumers. They often take the attitude that it's "buyer beware." By the industry's count, customers "win" in arbitration about half the time. But what's a win? Consider the following real case: An investor opened a brokerage account through an independent investment adviser, stating his objective as capital appreciation, not speculation.

The adviser sank all the money into options and lost around $500,000. The brokerage firm had spotted the problem but didn't tell the investor about it. there. "We see repeated appointment of arbitrators who are domineering and obnoxious," says Boston attorney David Shellen-berger. "These people continue to serve despite negative evaluations by lawyers and fellow arbitrators." Industry officials treat these as exaggerated tales by customers who are sore because they lost their case.

But maybe they have a right to be sore. Arbitrations are secret trials before judges who aren't publicly accountable for what they do. Customers of brokerage firms almost always have to agree to take disagreements to arbitration. In most cases, you'll have to use an industry-sponsored forum. The vast majority go to the National Association of Securities Dealers (NASD).

A panel of one or three arbitrators hears the dispute. Each side I keep hearing from readers some livid, some anguished who say they've been abused by the securities industry. First, they lost serious money because their stockbrokers mis-' led them in some way. When they i took their complaint to arbitra- tion, they say they were bullied by arbitrators who treated their losses as all their fault. I haven't been able to witness a securities arbitration.

The indus- try keeps the press and other outsiders away. Two friends who have served as arbitrators think the cases they heard were han- died fairly, impartially and with respect. But these readers tell me quite different stories. I hear about cruel questioning, arbitrators who nap, arbitrators who refuse to examine evidence and panels that are openly biased in favor of the brokerage firm. They're a minority but they're The arbitrators agreed that the brokerage firm was negligent.

But, blaming the victim, one panel member said that the investor "just wanted to get rich." The investor was awarded $100. Because he received that paltry sum, the industry called the case a win. Many other aspects of arbitration are also tough on customers. In a report released in January 1996, a commission headed by former Securities and Exchange Commissioner David Ruder recommended more than 70 reforms. The NASD is moving ahead on several of them.

But none is more important than reforming the system for picking arbitrators, says Scotts-dale, attorney Rosemary Shockman, president of the Public Investors Arbitration Bar As Write to Jane Bryant Quinn in care of The Pantagraph, 301 W. Washington Bloomington, III. 61702-2907. American farming started 10,000 years ago, seeds suggest open up a whole new era of research in a time period that isn't well understood." Smith's findings appeared in Friday's issue of the journal Science. Archaeologists can tell that the squash was domesticated because the seeds were larger than wild varieties of squash that grow nearby suggesting that humans had selected for larger and better gourds.

The finding comes as a surprise to most study the seeds, which relies on the fact that a form of carbon known as carbon-l4 slowly decays over time, came up with' dates between 8,000 and 10,000 years old. The work suggests that early Americans took their time in moving from huntergatherer groups to a society based on agriculture, Smith said. They probably took thousands of years to get from growing squash to growing other crops such as beans and corn full time, he said. archaeologists, who have thought that agriculture got started in the Americas only around 4,000 to 5,000 years ago. Remains of domesticated beans and corn from other Mexican caves appear to be this young.

So Smith and other archaeologists figured that the squash seeds would also be only a few thousand years old, although earlier work had hinted at an older age for them. A recently refined technique to that early Americans started growing crops at around the same time as their counterparts in the Near East and China. The new work "really gives us a solid point of reference for understanding the earliest American farmers," said Bruce Smith, director of the archaeobiology program at the National Museum of Natural History in Washington. "At the same time," he said, "it should By Knight-RidderTribune Service DALLAS A handful of ancient squash seeds is overturning ideas of when the first Americans started farming, according to a published scientific report. Archaeologists said that the seeds and other fragments of squash, found in a Mexican cave, date to nearly 10,000 years old.

This would make squash the first domesticated plant in the Americas and suggests an tarn- mkmmammmtmmm amU Americans lack bond to savings: consumer study aw; mux mm in 1 1 tfTCWWamMMmlmmmtMH inn 'it I i jn. Kjr I mm- i a IP fea I i I 3 Aptiva. MM savings plans seriously. The survey found that a saver's progress is determined more by having a comprehensive plan than by having a good grasp of investment concepts. Households that report having a financial plan or goal are saving twice as much as those without plans, Colasanto said.

Those same planners report they are saving for all goals rather than just retirement. "Those with a plan are saving more money, regardless of their income," she said. Households with financial plans in place also reported they have a better grasp of where their money is being spent each month. They distribute their funds better, she said. CFA and NationsBank are launching a nationwide campaign to educate consumers on financial planning.

Plans include posting financial planning advice on the Internet and holding seminars in cities across the U.S. The effort will be aimed in particular toward minorities and low-income households. "This research makes it clear that you don't have to be a financial expert to be financially successful," said Ken Lewis, NationsBank president. "What's important is that you have a plan to reach your goal." WASHINGTON, D.C. Sixty-five million American households will not be able to afford major life goals, such as paying for college, because they lack a comprehensive financial plan, according to a recent study.

The survey released by the Consumer Federation of America and NationsBank found that while most Americans are setting aside some money, they are saving too little. "Americans are starting to get serious about their retirement years, but they are off track in saving for other life goals," said Steven Brobeck, director of the federation. Approximately 66 percent of all households put money into either an emergency or retirement fund. But according to the study, only about a third are saving to purchase a home or to pay for future College expenses. 1 About half of those surveyed say they are saving to make a major purchase, such as a car, and 17 percent say they have been setting aside funds to care for an elderly parent.

"They are ignoring important goals," said Diane Colasanto of the Princeton Survey Research Associates, who administered the study. The survey of 1,770 households found that 84 percent currently have some sort of savings, but many find it hard to follow through on a plan. f' I l.z- I I. w.v.'.w. I f.

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