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.

Osaic Investment Lawyer

Osaic, formerly known as Advisor Group, is one of the largest wealth management firms in the United States. Over the years, the firm has built a strong presence in the financial services industry, catering to a diverse clientele through its network of financial professionals. With a focus on independence and advisor empowerment, Osaic continues to evolve and adapt to the shifting financial landscape.

History of Osaic

Osaic’s origins date back to 1988 with the establishment of SunAmerica Planning Centers, Inc., a company specializing in financial and retirement planning. Over the decades, the firm underwent multiple ownership transitions and acquisitions, including its affiliation with American International Group (AIG) and subsequent sale to private equity firms.

In 2016, the company was acquired by Lightyear Capital LLC and PSP Investments, rebranding as Advisor Group Holdings, Inc. In 2019, Reverence Capital Partners took over ownership, further expanding its reach. The most significant shift came in June 2023, when Advisor Group rebranded as Osaic, consolidating its various subsidiary firms under a single unified entity. This transformation marked a new era for the company, emphasizing operational efficiency and a streamlined approach to financial services.

Key Business Metrics

CRD Number: Osaic Wealth, Inc. is registered under CRD number 23131.
Number of Employees: Osaic supports over 11,000 affiliated financial professionals across all 50 states, backed by more than 2,500 home office staff members.
Assets Under Administration (AUA): The firm manages over $700 billion in client assets.
Revenue: The firm’s financial growth has been consistent, fueled by acquisitions and strategic expansions.

Regulatory and Compliance Landscape

Osaic operates under strict financial regulations established by authorities such as the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC). The firm is required to comply with numerous industry standards to ensure transparency and protect clients. As a major player in the industry, Osaic must navigate complex compliance requirements to maintain its credibility and operational integrity.

Notable Regulatory Issues

Like many large financial institutions, Osaic has faced regulatory challenges over the years. The firm has encountered scrutiny related to the misapplication of sales charge waivers, unsuitable investment recommendations, and lapses in supervision. These regulatory matters underscore the importance of ongoing compliance efforts and internal oversight to safeguard client interests.

One of the more significant cases involved a failure to apply appropriate sales charge waivers for certain transactions, resulting in unnecessary fees for customers. Additionally, past issues have arisen regarding unsuitable investment recommendations, particularly with complex financial products. Ensuring stronger risk management and compliance practices remains a priority for Osaic as it continues to refine its operations.

Customer Complaints

Customer complaints are an inevitable part of any large financial institution’s history. Osaic has had its share of grievances, with clients raising concerns about fee structures, investment recommendations, and overall advisor guidance. While not all complaints escalate to regulatory action, they highlight areas where the firm can improve its client communication and investment strategies.

To maintain client trust, Osaic has implemented measures to enhance transparency and improve advisor training. The firm continues to invest in technology and client support systems to address concerns more efficiently and reduce instances of dissatisfaction.

Commitment to Advisor Support

Osaic places a strong emphasis on advisor independence, allowing financial professionals to operate with flexibility while benefiting from the firm’s extensive resources. The company provides training, technology, and operational support to help advisors deliver high-quality financial services to their clients.

By fostering a collaborative environment, Osaic seeks to empower advisors with the tools they need to succeed while maintaining compliance with industry standards. The firm’s large-scale operations enable it to offer competitive resources that smaller firms may struggle to provide.

Customer Experience and Reputation

Osaic is known for its comprehensive investment offerings and commitment to financial planning. However, the firm’s reputation has been shaped by both its successes and challenges. While it has built a strong network of professionals and maintains significant assets under administration, past regulatory issues and customer complaints have impacted its standing in the industry.

The firm continues to invest in technology, compliance measures, and advisor support to enhance client experience. Its efforts to streamline operations and unify its services under the Osaic brand reflect a commitment to long-term growth and customer satisfaction.

Looking Ahead

As Osaic moves forward, its focus remains on refining its business operations, strengthening compliance measures, and enhancing advisor and client experiences. The firm’s recent rebranding and consolidation efforts signal a new chapter aimed at creating a more cohesive and efficient organization.

For personalized guidance and expert insights into Osaic’s financial offerings, consider reaching out to Bakhtiari & Harrison for a consultation on wealth management strategies tailored to your needs.