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.

What is the SEC IAPD – Investment Adviser Public Disclosure?

If you’ve lost money due to a financial advisor’s misconduct, it’s natural to feel frustrated, uncertain, and betrayed. But you’re not powerless. One of the most valuable tools available to investors is the SEC’s Investment Adviser Public Disclosure (IAPD) system. It allows you to research an advisor’s background, uncover past misconduct, and make informed decisions about who you can trust with your money moving forward.

In this blog, we’ll walk you through what IAPD is, what kind of information it provides, and how you can use it to protect yourself or build a case after advisor misconduct. We’ll also explain how it compares to FINRA’s BrokerCheck and share practical steps to help you move forward with confidence.

Table of Contents

What Is the IAPD and Why Does It Matter?

The Investment Adviser Public Disclosure (IAPD) system is a free, online resource created to help the public access background information on investment advisers. Maintained by the U.S. Securities and Exchange Commission (SEC) and state securities regulators, IAPD allows you to look up registered investment advisory firms and the individual professionals who work for them.

It exists to protect investors by promoting transparency in the investment advisory industry. Financial advisors are entrusted with your money and your future. IAPD helps ensure they are held accountable for their actions, and gives investors an opportunity to identify warning signs before—or after—harm occurs.

Who Is Included in the IAPD?

IAPD includes a wide range of investment professionals:

SEC-registered investment adviser (RIA) firms: These are typically firms that manage over $100 million in client assets and are required to register with the SEC.
State-registered investment adviser firms: Firms managing under $100 million in assets are often registered and regulated by state agencies. IAPD provides access to their filings as well.
Investment adviser representatives (IARs): These are the individuals who provide investment advice on behalf of firms. IAPD may include their credentials, exam history, and disciplinary records, depending on the state.
Exempt reporting advisers: Even firms that aren’t fully registered may be required to file limited information, which is also available through IAPD.

If you’re researching an individual or firm who gave you investment advice for a fee, chances are they will appear in the IAPD system. Even if they’re no longer active, many remain in the database for up to 10 years after their registration ends.

What Information Can You Find in an IAPD Report?

When you search for an adviser or firm on IAPD, you’ll find detailed information taken from their regulatory filings, primarily from a form called Form ADV. Here’s what you can expect to see:

1. Registration Details

You’ll find out whether the firm or individual is currently registered, and with which regulators. The report also shows the date they were approved and whether their registration is active, terminated, or suspended.

2. Business Operations and Services

The IAPD profile outlines the advisory firm’s business model, the types of services they offer (such as financial planning or portfolio management), and the types of clients they serve (individuals, institutions, etc.). This helps you understand what the firm does—and whether they were authorized to do what they claimed.

3. Fees and Compensation

The report details how the adviser is paid, including whether they charge flat fees, hourly rates, a percentage of assets under management, or earn commissions. This is a key area to check for conflicts of interest. For example, if the adviser recommends products from which they receive a commission, that’s something you deserve to know up front.

4. Affiliations and Outside Business Activities

You can see whether the firm or individual has affiliations with broker-dealers, insurance companies, or other financial entities. These relationships can influence the advice you receive and may represent potential conflicts.

5. Disciplinary History

The “Disclosures” section includes any disciplinary or legal issues in the adviser’s past. This can include regulatory actions, civil lawsuits, customer complaints, employment terminations, and even bankruptcy filings. If the adviser or their firm has a history of misconduct, it will likely appear here.

Red Flags to Watch For in IAPD Profiles

The IAPD system is only useful if you know what to look for. Here are some common warning signs:

Regulatory Actions: Any fines, suspensions, or orders issued by the SEC or state regulators should raise concern.
Customer Disputes or Complaints: If other investors have filed complaints or lawsuits, it may signal a pattern of misconduct.
Criminal Charges or Convictions: Felony charges or convictions related to fraud, theft, or financial crimes are serious red flags.
Undisclosed Conflicts of Interest: If you discover the adviser is receiving compensation from sources they didn’t disclose to you, that could indicate unethical behavior.
Unregistered Activity: If the adviser was not registered during the time they advised you, they may have been operating illegally.

Even a single red flag deserves attention—especially if it directly relates to the misconduct you experienced.

IAPD vs. FINRA’s BrokerCheck

You might be wondering how IAPD differs from another popular tool: BrokerCheck. Both are public databases that offer transparency into the financial services industry, but they serve slightly different purposes:

IAPD focuses on investment advisers, who provide financial advice for a fee and are regulated by the SEC or state authorities.
BrokerCheck focuses on brokers and broker-dealers, who sell securities and are regulated by FINRA.

Many individuals are dually registered as both brokers and advisers. In those cases, you can often find them in both systems. In fact, BrokerCheck will often link you directly to an adviser’s IAPD record, so you can see the full picture.

If your financial professional handled both advice and transactions, it’s a good idea to check both databases for a more complete view of their background.

How to Use IAPD After Advisor Misconduct

If you believe you were the victim of financial advisor misconduct, IAPD can help you investigate what happened and gather evidence. Here’s how:

Search for Your Advisor and Firm
Visit the IAPD website (adviserinfo.sec.gov) and enter the name of the individual or firm. You can also search by their CRD number if you have it.
Review Registration Status and Timelines
Check whether your advisor was properly registered during the time they worked with you. A lapse in registration can be a major issue.
Document Any Disclosures
Look closely at the disclosure section. Are there other clients who reported similar complaints? Are there past regulatory sanctions or legal actions? Save or print any relevant information for your records.
Compare What You See With What You Were Told
Were fees or business affiliations misrepresented? Did your advisor claim to be “independent” but was actually affiliated with a broker-dealer? These discrepancies can be evidence of misrepresentation or negligence.
Use the Information to Build Your Case
If you decide to pursue legal action or file a complaint, the information from IAPD can be a powerful asset. It helps paint a picture of who you were dealing with—and whether your experience was part of a broader pattern.

Take the Next Step

If you’ve experienced financial losses because of your advisor’s misconduct, don’t wait and wonder. The IAPD system gives you access to facts—now you need someone who can help you act on them.

Contact Bakhtiari & Harrison today for a free consultation. Our experienced investment fraud attorneys are here to review your case, explain your options, and guide you toward justice. We understand how devastating advisor misconduct can be—and we know how to fight back.

Let us help you reclaim your financial future. Call or message us today to speak with a member of our legal team.