Wall Street’s Captive Arbitrators Strike Again

July 9 (Bloomberg) -- A set piece of Voltaire’s 18thcentury masterpiece, “Candide,” is a scene in which theBritish, after losing a battle, execute one of their ownadmirals “pour encourager les autres.”

The analogy may be a bit heavy-handed, yet in many ways itfits what Finra -- the Financial Industry Regulatory Authority,Wall Street’s self-regulatory organization -- did to threearbitrators who, in May 2011, had the temerity to find in favorof a customer in a securities arbitration against Merrill Lynch,the nation’s largest brokerage and a unit of Bank of AmericaCorp. After awarding the estate of the customer more than$520,000 -- a large amount by arbitration standards --Finraheard from unhappy Merrill executives and fired the arbitrators,two of whom had many years of experience.