What is FINRA arbitration?

FINRA arbitration is a method of resolving disputes between investors and brokerage firms or financial advisors outside the court system. It involves a neutral third party, an arbitrator, who reviews the case and makes a binding decision.

Why choose arbitration over litigation?

Arbitration is typically faster, less formal, and more cost-effective than litigation. It also provides a final resolution to disputes, with limited grounds for appeal. Most relationships with financial advisors are formalized by entering into a contract which contains a dispute resolution clause. Nationally, most dispute resolution clauses provide for FINRA arbitration.

Who can file a FINRA arbitration claim?

Investors, brokerage firms, and financial advisors can file a FINRA arbitration claim if they have a dispute related to securities or investment activities. FINRA arbitration is normally the forum for disputes among registered persons, brokerage firms and the public customer clients of the firms.

How do I start the FINRA arbitration process?

To start the arbitration process, Bakhtiari & Harrison will file a Statement of Claim with FINRA, detailing the nature of the dispute, the parties involved, and the relief sought.

What is a Statement of Claim?

A Statement of Claim is a written document submitted by the claimant outlining the facts of the dispute, legal claims, and the desired outcome.

What happens after filing the Statement of Claim?

After filing, the respondent has 45 days to answer the Statement of Claim. The answer must address the claims and may include counterclaims or other relief sought.

What fees are involved in FINRA arbitration?

Fees include filing fees, hearing session fees, and possibly member surcharges or process fees, depending on the specifics of the case.

Can I represent myself in FINRA arbitration?

Yes, you can represent yourself, but many choose to hire an attorney with experience in securities arbitration due to the complexity of the process. Investors and industry professionals who choose to represent themselves do so at a substantial disadvantage, Wall Street firms typically retain experienced professional counsel to represent their interests.

How are arbitrators selected?

Arbitrators are selected through the Neutral List Selection System (NLSS), which provides a list of potential arbitrators. Both parties rank and strike names to agree on a panel.

What qualifications do FINRA arbitrators have?

FINRA arbitrators include attorneys, accountants, financial professionals, and public members who have undergone training and meet FINRA’s qualification standards.

How long does the arbitration process take?

The process typically takes 12-18 months from filing to the final award, but this can vary based on case complexity and scheduling. Preference may be given to investors that are seriously ill or elderly.

What is a prehearing conference?

A prehearing conference is a meeting between the parties and the arbitrators to discuss procedural issues, set a schedule, and address preliminary matters including final FINRA arbitration hearing dates.

What is discovery in arbitration?

Discovery is the exchange of documents and information between the parties to prepare for the hearing. It is more limited than in litigation.

What happens during the arbitration hearing?

During the hearing, both sides present evidence, call witnesses, and make arguments. The arbitrators then deliberate and render a decision.

Is the arbitration hearing open to the public?

No, arbitration hearings are private and confidential. Only the parties, their representatives, and the arbitrators may attend.

Can I settle my case before the hearing?

Yes, parties can settle at any time before the arbitrators render a decision, often through negotiation or mediation.

What is mediation in the context of FINRA arbitration?

Mediation is a voluntary process where a neutral mediator helps the parties negotiate a settlement. It is separate from arbitration and non-binding.

What happens if I lose in arbitration?

If you lose, the arbitrator’s decision is final and binding. There are limited grounds for challenging the award in court.

Can I appeal an arbitration decision?

Generally, you cannot appeal an arbitration decision. However, you can seek to vacate the award on very narrow grounds, such as arbitrator misconduct.

What types of disputes are resolved through FINRA arbitration?

Disputes include claims of fraud, breach of fiduciary duty, negligence, breach of contract, and other issues related to securities and investments.

How are damages determined in arbitration?

Damages are determined based on the evidence presented, including financial records, expert testimony, and the specifics of the case.

Can arbitrators award attorney’s fees?

Arbitrators can award attorney’s fees if provided for by law, contract, or if both parties request it.

How do I enforce an arbitration award?

An arbitration award can be enforced in court through a confirmation process, making it a judgment that can be collected.

What is expungement in FINRA arbitration?

Expungement is the process of removing information from a broker’s record on the Central Registration Depository (CRD) system. It is only granted under specific conditions.

What are the grounds for vacating an arbitration award?

Grounds for vacating an award include arbitrator bias, fraud, corruption, or misconduct, as well as exceeding their powers.

Are arbitration awards public?

Yes, arbitration awards are published on FINRA’s website, providing transparency and access to past decisions.

What is the role of the Office of Dispute Resolution?

The Office of Dispute Resolution administers arbitration and mediation cases, ensuring that the process runs smoothly and efficiently.

What is a Simplified Arbitration?

Simplified Arbitration is for cases involving claims of $50,000 or less, allowing for a quicker and less expensive resolution without a hearing.

Can I request an expedited hearing?

Yes, in certain circumstances, such as elderly or seriously ill parties, you can request an expedited hearing.

What is the role of an arbitrator?

An arbitrator acts as a neutral decision-maker, reviewing evidence, hearing testimony, and issuing a binding decision on the dispute.

How do I prepare for an arbitration hearing?

Preparation involves gathering evidence, preparing witnesses, and developing a clear case strategy to present to the arbitrators.

What types of evidence are admissible in arbitration?

Evidence can include documents, emails, financial records, expert reports, and witness testimony, subject to the arbitrators’ discretion.

Can I request documents from the other party?

Yes, through the discovery process, you can request relevant documents and information from the other party to support your case.

How does FINRA handle conflicts of interest with arbitrators?

FINRA requires arbitrators to disclose any potential conflicts of interest, and parties can object to arbitrators they believe are biased.

What happens if a party does not comply with discovery?

If a party does not comply, the other party can file a motion to compel, asking the arbitrators to order compliance and possibly impose sanctions.

What is a motion in arbitration?

A motion is a formal request for the arbitrators to make a ruling on a specific issue, such as compelling discovery or dismissing a claim.

Can I request interim relief in arbitration?

Yes, you can request interim relief, such as temporary restraining orders or injunctions, to preserve the status quo pending the final decision.

How are hearing locations determined?

Hearing locations are typically determined by the location of the claimant unless both parties agree to a different venue.

What is a telephonic or virtual hearing?

Telephonic or virtual hearings are conducted via phone or video conference, allowing parties to participate remotely.

How are arbitration awards paid?

Awards are typically paid by the losing party within 30 days of the decision, unless otherwise specified by the arbitrators.

What if the losing party does not pay the award?

If the losing party does not pay, you can seek enforcement through the courts, turning the award into a legally enforceable judgment.

Are there any limits on the types of claims I can bring in arbitration?

FINRA arbitration covers a broad range of claims related to securities, but there are some statutory and regulatory limits on certain types of claims.

Can I bring a class action in FINRA arbitration?

No, class actions are not permitted in FINRA arbitration. However, you can join other claimants in a single arbitration if the claims are similar.

What is the role of expert witnesses in arbitration?

Expert witnesses can provide specialized knowledge and opinions to help explain complex financial issues to the arbitrators.

How are hearing dates scheduled?

Hearing dates are scheduled based on availability of the parties and arbitrators, with consideration for the complexity of the case.

Can I request a different arbitrator if I believe one is biased?

Yes, you can challenge an arbitrator if you believe they have a conflict of interest or bias that affects their impartiality.

What is a “chairperson” in a FINRA arbitration panel?

The chairperson is the lead arbitrator who manages the procedural aspects of the case and ensures the hearing runs smoothly.

How does FINRA ensure fairness in arbitration?

FINRA has rules and procedures in place to ensure a fair and impartial process, including arbitrator training and disclosure requirements.

How do I learn more about the FINRA arbitration process?

For more information, you can visit FINRA’s website, contact their Office of Dispute Resolution, or consult with experienced attorneys like those at Bakhtiari & Harrison.

How can Bakhtiari & Harrison help with FINRA arbitration?

Bakhtiari & Harrison can assist with filing claims, responding, selecting arbitrators, discovery, hearings, and ensuring the best possible outcome through skilled representation and strategic advice.

Representing Investors and Financial Professionals

Bakhtiari & Harrison is a premier nationwide law firm, focused on representing clients resolving securities industry related disputes through arbitration and state and federal court litigation. The firm’s partners have extensive experience in securities, employment and regulatory matters. Our focus is on delivering strategic and creative client-centric solutions.

We represent individuals and institutions in securities arbitration and litigation claims before FINRA (Financial Industry Regulatory Authority), AAA (American Arbitration Association), other arbitration providers and in state and federal courts. The firm represents financial services professionals, registered investment advisors and broker-dealers in employment matters, industry disputes and regulatory investigations.

Nationwide Representation in Securities Arbitration and Litigation for More than Four Decades

Retaining an attorney and law firm is an important decision made with great care. The Importance of Selection of Counsel cannot be overstated and may be the most important decision a litigant makes before or after a dispute arises. For more information, please review our Experience and Credentials.

The Financial Industry Regulatory Authority (FINRA) is a non-governmental organization overseeing brokerage firms and their registered representatives in the United States. The vast majority of securities industry disputes are heard by FINRA arbitration panels located throughout the country. Bakhtiari & Harrison represents parties nationwide and has represented international clients in disputes with United States based financial service firms.

The national and local press have covered our attorneys on securities arbitration, securities litigation, regulatory and employment issues of importance, some of which can be found at our In The News section.

Aggressive Securities and Investment Fraud Lawyers

At Bakhtiari & Harrison, we focus on quality, aggressive advocacy, rigorous preparation and client focused results. We bring decades of experience and the resources to offer personalized service tailored to your needs. We understand the unique needs and concerns of each client and implement an effective and compelling strategy from the outset.

We are dedicated to helping those affected in securities related disputes. Our partners have successfully resolved thousands of securities arbitration cases through full evidentiary arbitrations or settlements, recovering more than $250 million for our clients.

Experienced Counsel Representing Financial Professionals

Bakhtiari & Harrison also provides legal services to Broker-Dealers and Registered Investment Advisors (RIAs) along with their officers, directors, registered representatives, employees, and associated persons.

Our firm offers expertise, legal guidance and support throughout the various phases of broker-dealer and investment advisor operations. We have extensive experience providing comprehensive counseling to firms ensuring they navigate the complex landscape of investment advisory services and compliance with confidence.

At Bakhtiari & Harrison, we provide expertise, guidance and robust support throughout the stages of a professional career, from on-boarding to employee forgivable loans, compliance, partnership disputes, expungement and other employment related issues. We provide strategic advice on employment contracts, dispute resolution, and transitional strategies to support professionals looking to expand, adapt, or enhance their business operations.

We are committed to delivering comprehensive legal solutions that empower professionals to succeed and excel in the competitive environment of the securities industry.

The Intake and Consultation Process

Our initial consultation is free. We treat the details of your case and all documents with the utmost confidentiality and care. There is no cost or charge for our review, consultation and determination of whether to proceed.

We view each case as a partnership with our clients, guiding them through the process every step of the way. Our goal is to secure the best possible outcome. We make it easy to work with us. Clients can send documents electronically and encrypted online or deliver originals or copies. We offer in-person, video and telephone meetings. Contact us to discuss your potential matter.

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Customer Reviews

Jane

I recently worked with David, and I can’t recommend him enough. He’s incredibly knowledgeable and always had the right answers to my questions. From the start, he made me feel confident about my case and handled everything with top-notch professionalism.

What really stood out was how easy he was to talk to. He broke down all the legal jargon and made sure I understood every step of the process. Plus, his calm and confident demeanor was reassuring throughout.

If you need an attorney who’s not only great at what he does but also genuinely cares about getting you the best outcome, David is your guy. Definitely the best attorney I’ve ever worked with!

B Green

David was incredibly helpful and insightful in guiding me through a difficult advisor issue. Great experience

Rebecca B.

Mr. Harrison is the consummate professional. He is detailed, analytical and thoughtful. If you are looking for a securities attorney. I would highly recommend him without any reservation!

Margie S.

I am beyond grateful for the exceptional legal representation provided by Mr. Harrison. Facing a challenging case involving intricate financial and investment laws, Mr. Harrison demonstrated unparalleled integrity and legal acumen from the initial filing to the successful mediation and settlement. Throughout the process, he patiently guided me, explaining each strategic decision with clarity and insight.

Mr. Harrison’s commitment to upholding the highest ethical standards was evident in every aspect of his work. Remarkably, he navigated the case to a favorable resolution without resorting to presenting damaging evidence, a testament to his mastery of the law and unwavering integrity.

I cannot recommend Mr. Harrison highly enough. His dedication and expertise secured a favorable outcome, and my son and I are profoundly grateful for his diligent efforts. Thank you, Mr. Harrison, for your exceptional representation and unwavering support.

Jeff S.

Excellent attorney. Great outcome. Highly recommended.

Justin F.

Let me start by saying that David is an exceptional attorney and is extremely well respected in his industry among his peers. I retained David for a case involving options which ultimately went to an arbitration hearing. There were a lot of facts and moving pieces around the case. Despite this, David was able to reduce the complexity to its root, which was a failure of the broker-dealer to disclose material information.

With this strategy employed, David was able to masterfully deconstruct the case in a manner that made sense and was persuasive to the arbitration panel—no easy task for a case involving derivatives! We ended up winning the case and I received full compensation with my broker-dealer paying David’s attorney fees in full.

David is an attorney who truly cares about his clients. He was always accessible and compassionate as he helped me navigate this case. I highly recommend David. His expertise will put any client in the best position possible for a positive outcome.

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