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.

Cetera Advisor Network LLC Investment Lawyer

Cetera Advisor Network LLC is one of the largest independent broker-dealers in the United States, offering a platform for financial advisors to deliver customized wealth management solutions. With a strong focus on supporting independent advisors, Cetera has grown into a significant player in the financial services industry. This blog delves into the history of the company, its current scale of operations, and its regulatory and customer landscape.

History of Cetera Advisor Network LLC

Cetera Advisor Network LLC traces its origins to 1983 when it was initially established as Financial Network Investment Corporation. The company was designed to empower independent financial advisors with the tools and support they need to grow their practices. Over the years, Cetera has undergone several transformations, including rebranding under the Cetera Financial Group umbrella in 2010.

The rebranding was part of a larger strategy to consolidate multiple broker-dealer entities under a single, cohesive network. This transition marked a new phase of growth and innovation, allowing Cetera to expand its service offerings and better align with the evolving needs of financial advisors. Today, Cetera Advisor Network LLC operates as part of Cetera Financial Group, which serves thousands of independent advisors across the United States.

Number of Representatives

Cetera Advisor Network LLC boasts a robust network of financial professionals. As of recent reports, the company supports over 8,000 independent advisors, making it one of the largest independent broker-dealers in the country. These advisors operate in various capacities, including wealth management, retirement planning, and investment advisory services. This vast network enables Cetera to serve a diverse client base, ranging from individual investors to small businesses and large institutions.

Regulatory and Compliance Landscape

As a regulated broker-dealer and registered investment adviser, Cetera Advisor Network LLC operates under the oversight of the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC). Over the years, the company has faced regulatory scrutiny, which is not uncommon for large financial firms operating in a highly regulated environment.

Notable Regulatory Issues

Like many firms in the financial services industry, Cetera has encountered regulatory challenges. One significant instance occurred in 2020, when Cetera Advisor Networks, along with other Cetera Financial Group firms, settled with FINRA over allegations of supervisory failures. The firm agreed to pay fines related to issues such as inadequate oversight of mutual fund recommendations and variable annuity exchanges. While such settlements highlight the complexities of regulatory compliance, Cetera has taken steps to enhance its supervisory processes and strengthen its compliance infrastructure.

Customer Complaints

Customer complaints are another aspect to consider when evaluating a financial firm. Cetera, like its peers, has faced customer grievances over issues such as investment losses, misrepresentation, and fee transparency. The firm addresses these complaints through a combination of internal resolution processes and, where necessary, arbitration or mediation.

Commitment to Advisor Support

A key differentiator for Cetera Advisor Network LLC is its commitment to supporting independent financial advisors. The company provides a wide range of resources, including technology platforms, marketing support, and compliance assistance. Cetera’s technology solutions, such as its AdvisorWorks platform, are designed to streamline operations and enhance client service. By focusing on advisor-centric solutions, Cetera enables its representatives to deliver tailored financial advice that meets the unique needs of their clients.

Customer Experience and Reputation

Cetera’s reputation among customers and advisors reflects its strengths and areas for improvement. On the positive side, the firm is known for its advisor-focused approach and robust infrastructure. However, like any large organization, it has faced criticism in areas such as fee structures and transparency. Prospective clients and advisors are encouraged to conduct thorough due diligence and understand the terms and conditions associated with Cetera’s services.

Looking Ahead

Cetera Advisor Network LLC continues to evolve in response to industry trends and regulatory developments. The firm has shown a commitment to innovation, particularly in the areas of technology and practice management. By investing in these areas, Cetera aims to remain competitive and provide its advisors with the tools they need to succeed in a dynamic financial landscape.

In addition, Cetera’s focus on integrating environmental, social, and governance (ESG) considerations into its investment strategies reflects its alignment with broader industry shifts. This forward-thinking approach positions Cetera as a firm that not only adapts to change but actively embraces it.

Final Thoughts

Cetera Advisor Network LLC stands out as a prominent player in the independent broker-dealer space, offering a platform that empowers financial advisors to deliver personalized wealth management solutions. While the firm has faced regulatory and customer challenges, its commitment to innovation and advisor support underscores its dedication to long-term growth and improvement.

Whether you’re an investor seeking financial guidance or an advisor looking for a robust platform to grow your practice, Cetera Advisor Network LLC offers a range of opportunities worth exploring. For those interested in learning more, staying informed about the company’s developments and understanding its offerings in detail can pave the way for better financial outcomes, contact Bakhtiari & Harrison.