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.

Do I Need an Attorney for FINRA Arbitration? 5 Reasons Why Counsel is Essential

Q: 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.

If you believe your stockbroker defrauded you, you may wonder if hiring an attorney for FINRA arbitration is necessary. At Bakhtiari & Harrison, we focus on helping investors recover their losses through securities arbitration.

What is FINRA Arbitration?

FINRA arbitration allows investors to resolve disputes with brokers or brokerage firms without going to court. The process is efficient and cost-effective, ideal for handling fraud or unsuitable investment advice. Arbitration decisions are legally binding, making it crucial to understand the process and seek professional representation to ensure you maximize your recovery.

Why is FINRA Arbitration Important?

Arbitration provides investors with a way to recover losses from broker misconduct. Common types of cases include fraud, negligence, breach of fiduciary duty, or unauthorized trading. FINRA, the Financial Industry Regulatory Authority, oversees the process, which is typically faster and less expensive than court litigation. You can present your case and evidence to neutral arbitrators by participating in arbitration. They will make a final decision about your dispute.

Why You Should Hire an Attorney for FINRA Arbitration

You can represent yourself in securities arbitration. However, hiring an attorney can significantly improve your chances of success for several reasons:

FINRA Rules: FINRA arbitration follows specific procedures that can be difficult to navigate without legal expertise. An attorney ensures you meet deadlines, file paperwork correctly, and present your case effectively.
Maximizing Compensation: Brokerage firms typically have experienced legal teams representing them. An attorney helps level the playing field by building a strong case and negotiating for the compensation you deserve.
Managing Discovery and Evidence: The discovery process, where both parties exchange relevant information, is a critical stage in arbitration. An attorney knows which documents to ask for. They can analyze complex financial data. Experienced securities arbitration lawyers know how to use evidence to help you obtain maximum recovery.
Expert Witnesses: Many securities arbitration cases require expert testimony to explain complex financial concepts. Attorneys know how to work with experts who can clarify investment strategies or quantify your financial losses.
Avoiding Mistakes: Arbitration decisions are final and difficult to appeal. An attorney ensures you avoid costly errors, which could hurt your chances of recovering your losses.

File for Arbitration

Filing for arbitration begins with submitting a claim to FINRA. Your attorney will draft a comprehensive statement of claim outlining your dispute and desired outcomes. This document must be accurate and drafted to obtain documents in the discovery process.

How Long Does It Take to Get Paid After Arbitration?

The time it takes to receive payment after FINRA arbitration can vary. Once arbitrators issue an Award, the brokerage firm has 30 days to pay any awarded damages. However, delays can occur if the firm contests the award or files for vacatur. An attorney can help you navigate this phase and ensure you receive your compensation quickly.

What is Securities Arbitration?

Securities arbitration is a dispute resolution process between investors and brokers or brokerage firms. Securities FINRA arbitration is a different way to resolve disputes instead of going to court. It often deals with cases of fraud, negligence, or poor supervision. This includes broker-dealers, securities firms, and FINRA members. The FINRA arbitration forum usually manages these cases. The process concludes with a legally binding decision from a panel of arbitrators.

Why Hire an Arbitration Lawyer?

Hiring an arbitration lawyer in the securities industry can significantly improve your chances of a favorable outcome. Securities arbitration lawyers concentrate on FINRA arbitration rules and procedures, ensuring your case is well-prepared and presented. They manage negotiations and build strong cases. They also protect your interests during the process. This is especially important when dealing with brokerage firms and their legal teams.

While hiring an attorney for FINRA arbitration is not mandatory, it is highly advisable. At Bakhtiari & Harrison, we aggressively and correctly handle your case, ensuring we protect your rights. The complexities of FINRA arbitration and its regulatory organization can lead to costly mistakes if not managed by an expert.

If your stockbroker defrauded you, contact Bakhtiari & Harrison for legal representation. At Bakhtiari & Harrison, we focus on FINRA arbitration and will work to recover your losses.

FAQs Regarding the FINRA Arbitration Process

Bakhtiari & Harrison – Aggressive FINRA Arbitration Attorneys

Ryan Bakhtiari is a respected attorney who has served as President of PIABA, (the Public Investors Arbitration Bar Association). He also chaired the FINRA NAMC, or National Arbitration and Mediaiton Committee which makes rules, recomendations and policy for FINRA arbitration.

David Harrison brings a wealth of litigation experience to the table. His career includes work at the District Attorney’s Office, where he built his litigation skills. He also served as in-house counsel at Morgan Stanley Dean Witter, representing the firm and its stockbrokers.

David had a Series Seven license from his time at Shearson Lehman Brothers. This helped him understand the financial industry and its rules better.

If you need help with FINRA arbitration, contact Bakhtiari & Harrison for a free consultation and learn how we can assist you in recovering your losses.