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.

Ameriprise Financial Investment Lawyers

Ameriprise Financial Services, Inc., headquartered in Minneapolis, Minnesota, is a full-service financial services firm and registered investment adviser (RIA). The company provides financial advisors, institutional investors, and retail clients with a comprehensive range of investment products, wealth management services, and insurance solutions. This review examines Ameriprise Financial’s history, regulatory profile, and key business metrics, with a focus on compliance and client relations.

History of Ameriprise Financial

Founded in 1894 as Investors Syndicate, Ameriprise has developed into one of the nation’s leading financial planning firms. The company has undergone several name changes and corporate transformations before becoming a publicly traded entity in 2005. Ameriprise has strengthened its service portfolio through organic growth and strategic acquisitions, offering asset management, retirement planning, and insurance services.

Key Business Metrics

CRD Number

Ameriprise Financial is registered under CRD number 6363. Regulatory agencies use this identifier to track the firm’s licensing, disciplinary history, and disclosure records.

Number of Regulatory Events

Ameriprise Financial has been involved in numerous regulatory actions over the years. These matters primarily relate to supervisory lapses, disclosure issues, and compliance violations, which have led to increased regulatory scrutiny and operational reforms.

Number of Employees

Ameriprise Financial employs thousands of professionals nationwide, including financial advisors, operations personnel, and compliance staff. The firm maintains a large and distributed advisor network offering financial services across the country.

Assets Under Management (AUM)

Ameriprise Financial manages hundreds of billions of dollars in client assets, illustrating its expansive presence and influence in the financial services sector.

Revenue

Ameriprise generates multi-billion-dollar annual revenues through its investment advisory, wealth management, and insurance divisions.

Regulatory and Compliance Landscape

Ameriprise Financial operates under the supervision of the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC). Although Ameriprise has invested in building its compliance infrastructure, historical regulatory actions point to the need for continued vigilance in enforcing internal controls.

Notable Regulatory Issues

Ameriprise has faced various regulatory proceedings, including:

Supervisory Deficiencies: The firm has been cited for lapses in oversight of financial advisors, especially regarding the handling of client funds and the recommendation of complex products.
Disclosure Deficiencies: Regulatory bodies have flagged instances of inadequate disclosures concerning fees, conflicts of interest, and compensation arrangements.
Fines and Settlements: Ameriprise has paid regulatory fines to resolve compliance-related violations, reinforcing the importance of risk management and transparency.

These matters emphasize the ongoing need for robust compliance programs and advisor supervision.

Customer Complaints

Ameriprise has received customer complaints that include:

Alternative Investments: Some investors allege they were misled or not fully informed about the risks of high-commission or illiquid investment products.
Fee Transparency: Clients have raised concerns about unclear or undisclosed fees, leading to disputes over account performance and value.

Ameriprise has addressed many of these concerns through internal investigations, customer settlements, and dispute resolution processes such as arbitration.

Advisor Support and Client Services

Ameriprise provides its advisors with advanced planning tools, research resources, and operational support. The firm’s training programs and development tracks help advisors manage client relationships and comply with evolving regulatory requirements.

Clients of Ameriprise have access to a broad menu of investment solutions, including mutual funds, annuities, managed accounts, and insurance products. Despite this wide range, consistent oversight and improved communication remain critical for maintaining client trust.

Customer Experience and Reputation

Ameriprise has built a strong brand in the financial planning and wealth management space. However, regulatory issues and client complaints have affected public perception in certain cases. Investors and prospective clients are encouraged to review the firm’s background and regulatory record before engaging in long-term financial planning relationships.

Looking Ahead

Ameriprise continues to adapt its compliance, training, and service models to meet the demands of a changing financial services environment. Strengthening its internal oversight and addressing historical shortcomings will be essential to maintaining its market leadership and client loyalty.

Final Thoughts

Ameriprise Financial is a major player in the investment advisory and wealth management sectors, offering a wide spectrum of services for individuals and institutions. However, past regulatory concerns highlight the need for careful consideration when evaluating the firm as a financial partner. Clients and advisors alike should remain proactive in understanding the firm’s practices, policies, and commitments to compliance.

For more information, contact Bakhtiari & Harrison.