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.

Louisiana Investment Fraud Lawyer, Securities Attorney, SEC & FINRA Securities Law Firm, and Breach of Fiduciary Duty Attorney

Bakhtiari & Harrison is a law firm, focused on the representation of Louisiana based clients in complex arbitration, litigation, and related legal services in matters involving the securities industry. The firm’s partners have extensive experience in securities, employment and regulatory matters. Our focus is on delivering strategic and creative client-centric solutions.

Louisiana Investors Rely on Bakhtiari & Harrison to Handle Litigation and FINRA Arbitration Regarding Stock Brokers, Financial Investment Firms, and the Securities Industry

As an investment fraud lawyer firm, we represent both individuals and institutions in complex securities arbitration and litigation claims. These cases are typically brought before authoritative bodies such as the Financial Industry Regulatory Authority (FINRA), the American Arbitration Association (AAA), and other reputable arbitration providers. Our attorneys have extensive experience navigating the intricate rules and regulations that govern these organizations, ensuring that our clients receive strong representation in the fight against investment fraud. Whether you are an individual investor seeking justice or a large institution aiming to recover losses, our team of investment fraud lawyers is dedicated to holding fraudulent parties accountable. With a deep understanding of the securities industry, we work diligently to resolve disputes and help our clients recover their rightful compensation.

If you’ve been the victim of deceptive investment practices, our investment fraud lawyers offer personalized strategies designed to meet your unique needs, ensuring your rights are protected throughout the entire arbitration or litigation process. We also provide guidance on the types of investment fraud that are common in the industry, helping clients better understand their legal options. Whether it’s a case of broker misconduct, unauthorized trades, or Ponzi schemes, our firm is committed to seeking justice and financial recovery for investors harmed by fraudulent practices.

How a Louisiana Investment Fraud Attorney Can Help You

If you are located in Louisiana, have experienced financial loss, and are searching for an investment fraud lawyer, Bakhtiari & Harrison may be able to assist you. We represent Louisiana based investors and clients with these and other types of investment fraud and financial advisor misconduct cases.

Understanding Securities Code Violations in Trading Securities under Louisiana Law

In the complex world of securities trading, adherence to legal and ethical standards is paramount. Louisiana has established robust legal frameworks to ensure the integrity of their financial markets and protect investors from malpractices. This blog post will delve into some common violations under relevant Louisiana statutes, including suitability, unauthorized trading, misrepresentations, failure to disclose, and unfair business advantage.

Suitability under Louisiana Securities Law

A violation occurs when a broker or adviser recommends unsuitable investments, failing to consider the client’s unique circumstances. Such actions can lead to significant financial losses for the client and potential legal liability for the adviser. The Louisiana suitability requirement is integral to protecting investors from inappropriate and potentially harmful investment strategies.

Louisiana requires investment advisers to act in the best interests of their clients. Under the Louisiana Securities Law, advisers must not mislead or deceive clients regarding investment suitability. Ensuring recommendations align with clients’ financial goals and risk tolerance is critical.

Unauthorized Trading under Louisiana Securities Law

The Louisiana Securities Law also prohibits unauthorized trading. Brokers must secure client consent before executing any trades. Violations can result in criminal penalties, fines, and the potential loss of licensure.

Misrepresentations Under Louisiana Securities Law

Similarly, under the Louisiana Securities Law, it is unlawful for any person to misrepresent or omit material facts in connection with the sale of securities. This includes false statements about the value or safety of an investment. Violations can lead to severe penalties, including fines and imprisonment.

Failure to Disclose Material Information under Louisiana Law

Louisiana’s Securities Law also mandates full disclosure of all material information to investors. Failure to disclose can result in criminal and civil penalties, aiming to protect investors from fraud and deception.

Unfair Business Advantage under Louisiana Securities Laws

In Louisiana, similar protections are provided under the Louisiana Unfair Trade Practices and Consumer Protection Law, which prohibits deceptive acts and practices in the conduct of business, including securities trading. This includes insider trading, market manipulation, and other unfair practices.

Common Louisiana Code Violations in Trading Securities

Several other common violations under relevant Louisiana statutes include:

Churning: Excessive trading in a client’s account primarily to generate commissions for the broker. This violates fiduciary duties under Louisiana’s Securities Law.
Front-Running: Brokers executing orders on a security for their own account while taking advantage of advance knowledge of pending orders from their customers. This can violate Louisiana statutes.
Ponzi Schemes: Investment frauds that pay returns to earlier investors from new capital contributed by newer investors, rather than from profit earned. These schemes are addressed by Louisiana’s Securities Law.
Insider Trading: Trading a public company’s stock or other securities based on material, non-public information about the company. This violates fair market practices as described in Louisiana’s Securities Law.
Failure to Supervise: Supervisors failing to adequately oversee the actions of brokers, leading to various forms of misconduct. This is addressed under Louisiana’s financial regulations.

Understanding and adhering to these laws and regulations in Louisiana is crucial for maintaining market integrity and protecting investors from fraud and malpractice.

Louisiana Based Clients Should Contact Our Experienced Securities Fraud Lawyers Now

If you’ve been the victim of investment fraud, contact the securities fraud attorneys of Bakhtiari & Harrison for a free initial consultation. We represent victims of financial and investment disputes throughout Louisiana, including New Orleans, Baton Rouge, Shreveport, Lafayette, and Lake Charles, as well as clients in neighboring states. We will work tirelessly in pursuit of financial compensation for your investment losses.