Answer to Question 1
Arbitration is the ADR method used most often to resolve securities disputes. The source of
authority is the New York Stock Exchange and the National Association of Securities
Dealers, which favor arbitration and which require that industry agreements between brokers
and their customers, between employees and member firms and between the industry
organizations and its members contain an arbitration clause. Also, insofar as many securities
transactions involve interstate commerce, the Federal Arbitration Act also provides
authority.
Answer to Question 2
TRUE