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.

10 Winning Strategies for Expunging Your FINRA Record

Expunging your FINRA record is a critical question for financial advisors who are subject to an unwanted U5 or CRD disclosure. Financial professionals often face challenges that can harm their records. These marks can damage careers and reputations and prevent advisors from moving between firms in the securities industry.

This guide will help you learn the top 10 strategies for clearing your FINRA record and achieving a clean, professional reputation. FINRA, or the Financial Industry Regulatory Authority, oversees brokerage firms and their registered representatives in the United States. FINRA aims to protect investors by ensuring the securities industry operates fairly and honestly. Even small mistakes or misunderstandings can lead to marks on a financial professional’s record, making expungement very important.

Expunging Your FINRA Record Through Arbitration

A clean FINRA record is crucial for career advancement, getting new job opportunities, forgivable loans, and maintaining an excellent professional reputation. Financial professionals with clean records are more likely to attract and keep clients because trust is vital in the financial industry. A mark on your FINRA record can cause several problems:

Reputation and Credibility: A bad record or disclosure can harm your reputation and cause clients and colleagues to lose trust.
Career Advancement: Employers in the brokerage industry often prefer candidates with clean records, limiting opportunities for those with marks.
Client Loss: Clients might take their business elsewhere if they think you are untrustworthy.

Expunging your FINRA record through arbitration can restore your reputation, open career opportunities, and build client trust. In appropriate circumstances, expunging your FINRA record is also an investment in your career and future. Taking action to address unwanted or unfair disclosures on your record is vital for long-term success in the brokerage industry.

What is Expungement and How Does It Work?

Expungement removes certain information from your FINRA record. This process involves several steps and requires meeting eligibility requirements. Not all marks on a FINRA record can be expunged. Eligibility usually depends on the nature of the disclosure and whether it meets specific criteria, such as being factually impossible or clearly erroneous.

The Steps Involved in the Expungement Process

Filing a Request: Submit a written request to FINRA explaining why you deserve an expungement.
Arbitration Hearing: An arbitration panel reviews the request and looks at evidence and testimonies.
Decision: Based on the evidence, the panel decides whether to grant the expungement.
Court Confirmation: Sometimes, a court must confirm the arbitration award.

The Role of a FINRA Expungement Attorney

An experienced FINRA expungement attorney can significantly increase your chances of success. An attorney can help gather evidence, prepare a strong case, and navigate the expungement process. Expunging your FINRA record is a service Bahtiari & Harrison provides in appropriate circumstances.

The Role of FINRA in Expungement

FINRA has specific policies and procedures that govern the expungement process. Understanding these rules is essential for navigating the process successfully. The CRD is a database that contains information about registered securities employees. It plays a central role in expungement, as expunged records are removed from the CRD. FINRA manages the CRD system and serves as a repository for information on registered representatives. We provide the service of expunging your FINRA record. Ensuring that your record is clean in the CRD is crucial for maintaining a good professional reputation in the brokerage industry.

FINRA Rule 2080: Essential for Expungement

FINRA Rule 2080 is the critical regulatory authority governing the expungement process. This rule outlines the criteria and procedures for expunging customer dispute information from a financial professional’s record. Expunging your FINRA record under FINRA Rule 2080 can only be granted if the claim is factually impossible or clearly erroneous or if the professional was not involved in the alleged misconduct.

Understanding FINRA Rule 2080 is crucial for anyone seeking expungement, as it ensures that only eligible cases are considered. Compliance with FINRA Rule 2080 is essential to navigate the expungement process successfully. Working with an attorney knowledgeable about expunging your FINRA record under FINRA Rule 2080 can significantly enhance your chances of a successful outcome. Keeping abreast of any updates or changes to FINRA Rule 2080 is also essential, as this can affect your eligibility and the overall process.

The Expungement Hearing: A Crucial Step

The expungement hearing is a vital part of the FINRA expungement process. During this hearing, an arbitration panel reviews your request for expungement and evaluates the evidence you provide. This is your opportunity to present your case, explain the context of the incident, and demonstrate your efforts to improve since the event occurred. Preparing thoroughly for the expungement hearing is essential. You will need to practice your testimony, organize your evidence, and be ready to answer questions from the panel. A well-prepared and persuasive presentation can significantly affect the outcome of your expungement request.

Expunging Your FINRA Record, Contact Bakhtiari & Harrison

We provide the service of expunging your FINRA record. BrokerCheck is a tool provided by FINRA that allows investors to check the background of brokerage firms and financial professionals. It’s a critical resource for transparency in the financial industry. Ensuring your record on BrokerCheck is clean is essential for maintaining trust with clients. A mark on your BrokerCheck report can be detrimental, affecting client perceptions and career opportunities. Clearing your record through expungement means removing negative information from BrokerCheck, thereby protecting your professional reputation. We provide the service of expunging your FINRA record.

Clearing your FINRA record is a critical step toward restoring your professional reputation and advancing your career in the brokerage industry. By following these proven strategies and working with an experienced FINRA expungement attorney, you can navigate the complex expungement process and maximize your chances of obtaining a clean CRD record.