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.

California Securities Fraud Attorney: 5 Important Tips for Investors

Securities fraud can derail the financial stability of investors and undermine trust in financial markets. The risks of fraudulent practices are significant in California, where financial innovation and investment opportunities abound. Securities fraud litigation offers investors a pathway to recover losses and hold wrongdoers accountable. California securities fraud attorneys at Bakhtiari & Harrison represent investors in disputes with Wall Street.

Securities Fraud Litigation in California: What Investors Should Know

This topic is crucial for investors, financial professionals, and anyone involved in securities trading. In this post, we’ll define securities fraud, explore California-specific laws, discuss the role of the SEC and FINRA, and explain how a California securities fraud attorney can help you protect your rights and recover your investments.

What is Securities Fraud?

Securities fraud refers to deceptive practices in the stock or commodities markets that lead investors to make decisions based on false information. These fraudulent activities often result in financial losses for investors while benefiting the perpetrators.

In California, securities fraud can involve misleading statements, insider trading, Ponzi schemes, unauthorized trading by brokers, or manipulation of market prices. It is regulated by both federal laws, such as the Securities Exchange Act of 1934, and state-specific statutes, such as the California Corporate Securities Law of 1968.

California-Specific Securities Fraud Laws

California has stringent securities laws to protect investors from fraudulent practices. The California Corporate Securities Law of 1968 is the primary statute governing securities transactions in the state. Key aspects include:

Disclosure Requirements: Companies must provide truthful and complete information about securities offerings.
Anti-Fraud Provisions: It’s illegal to defraud investors or make false statements related to securities.
Civil Remedies: Victims of securities fraud can pursue legal actions to recover financial losses, including damages and attorney’s fees.

A California securities fraud attorney can navigate these complex laws, ensuring your case is handled effectively.

The Role of the SEC and FINRA

The Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) play vital roles in regulating securities markets and addressing fraud:

SEC Enforcement: The SEC investigates and prosecutes securities fraud cases, including insider trading and false disclosures. Investors can benefit from SEC actions when wrongdoers are held accountable.
FINRA Arbitration: Many securities disputes, especially involving brokers, are resolved through FINRA arbitration. This process provides an alternative to traditional court litigation and is designed to resolve disputes more efficiently.

While these regulatory bodies work to protect investors, their actions don’t always result in full recovery of losses. That’s why working with a California securities fraud attorney is essential to maximize your compensation.

Real Examples of Securities Fraud

Several high-profile cases highlight the impact of securities fraud:

The Theranos Scandal: Investors in the California-based startup lost millions after being misled about the company’s technology.
Pump-and-Dump Schemes: Fraudsters in Los Angeles manipulated stock prices, leaving investors with significant losses when the prices plummeted.
Broker Misconduct Cases: FINRA frequently reports cases of brokers making unauthorized trades or misrepresenting investments.

Tips and Reminders for Investors

To protect yourself from securities fraud, consider these best practices:

Research Investments Thoroughly: Verify the legitimacy of any investment opportunity by reviewing company filings and financial disclosures.
Monitor Your Accounts: Regularly check your investment accounts for unauthorized trades or unusual activity.
Ask Questions: Don’t hesitate to seek clarity about risks, fees, or performance projections.
Work with Trusted Professionals: Verify the credentials of financial advisors or brokers and check their disciplinary records.
Consult an Attorney: California securities fraud attorneys at Bakhtiari & Harrison represent investors in disputes with Wall Street. A California securities fraud attorney can provide valuable guidance and representation if you suspect fraud.

Why Contact Bakhtiari & Harrison?

When facing securities fraud, choosing the right legal team can make all the difference. Bakhtiari & Harrison bring unparalleled expertise and dedication to each case.

Ryan Bakhtiari

Ryan Bakhtiari is a nationally recognized securities fraud attorney with extensive experience in investor advocacy. As a former president of the Public Investors Advocate Bar Association (PIABA), Ryan is a leading figure in fighting for investor rights. His deep knowledge of securities litigation and dedication to justice make him an invaluable asset to clients.

David Harrison

David Harrison is a seasoned litigator with a strong background in handling complex securities fraud cases. His meticulous attention to detail and commitment to achieving favorable outcomes have earned him a reputation as a trusted advocate for investors. David’s experience ensures that clients receive top-tier representation.

Proven Results: Bakhtiari & Harrison have recovered millions for defrauded investors.
Personalized Service: We tailor our approach to meet the unique needs of every client.
Industry Expertise: Our attorneys understand California’s securities laws and regulatory landscape.
Client-Focused Advocacy: California securities fraud attorneys at Bakhtiari & Harrison prioritize your goals and fight tirelessly to protect your financial future.

With California securities fraud attorneys at Bakhtiari & Harrison by your side, you’ll have a team of dedicated professionals committed to recovering your losses and holding fraudsters accountable.

If you’ve lost money due to securities fraud, don’t wait. Contact us today to discuss your case and explore your legal options.

Protecting your financial future starts with taking action. If you suspect securities fraud or have suffered financial losses, contact Bakhtiari & Harrison. California securities fraud attorneys at Bakhtiari & Harrison represent investors in disputes with Wall Street. Let us help you navigate the legal process and reclaim your investments.