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 Stock Market Losses Lawyers: Recover Your Losses

Investing in the stock market offers great potential, but it also comes with risks. Unfortunately, some financial advisors and brokers engage in unethical practices, causing significant losses. At Bakhtiari & Harrison, our California investment fraud attorneys specialize in securities litigation and FINRA arbitration to help you recover your losses. In essence, we hold Wall Street accountable.

Protect Your Investments from Fraud

Financial advisors and investment professionals must act in your best interest. However, securities fraud cases and negligence can cause substantial financial harm. Our law firm holds these professionals accountable through legal action.

Common Causes of Investment Losses

Unsuitable Investment Recommendations

Advisors should recommend investment strategies that fit your financial goals. Unsuitable investments can lead to lost money and financial instability. Sometimes advisors care more about making money than helping you. They might suggest risky investments that don’t match your comfort level or financial goals. This breach of duty can result in significant financial losses, leaving you with unsuitable investments.

Misrepresentation and Omission

Financial professionals must provide accurate information. Misleading details about investment risks, fees, or potential returns can result in poor decisions. If advisors hide important information or lie, they break your trust and put your financial security at risk. Misrepresentation and omission are serious offenses in securities law, and they can lead to substantial financial losses.

Churning

Excessive trading in your account to generate broker commissions, known as churning, can drain your investment. Brokers who engage in churning prioritize their earnings over your investment strategy, leading to unnecessary transaction fees and losses. This unethical practice not only depletes your investment but also undermines your financial goals.

Failure to Diversify

Advisors should help spread your investments to minimize risk. Concentrating investments in one area can lead to significant losses. Diversification is a fundamental principle of sound investment strategy. Advisors who fail to diversify your portfolio expose you to unnecessary risk. This negligence can result in substantial financial harm, especially during market downturns.

Unauthorized Trading

Trading without your consent violates trust and can cause severe financial damage. Unauthorized trading occurs when brokers make transactions without your approval, often to benefit from commissions or manipulate your account. This breach of trust can lead to significant financial losses and undermine your confidence in the financial system.

Legal Protections for California Investors

California has strong securities laws to protect investors from fraud. The Securities and Exchange Commission (SEC) and state regulations ensure financial advisors follow ethical practices. These laws aim to protect investors from unethical practices and ensure that financial advisors act in your best interest. When they fail to do so, you have the right to take legal action.

Financial advisors and brokers must follow the rules set by the SEC. They are required to provide accurate information to their clients. They must also disclose any conflicts of interest they may have. Additionally, they are expected to always act in the best interest of their clients.

California state laws, including the California Corporate Securities Law of 1968, provide additional protections for investors. These laws require advisors to register with the state and adhere to strict ethical standards. The California Department of Financial Protection and Innovation (DFPI) oversees these regulations and investigates cases of securities fraud.

How Bakhtiari & Harrison Can Help

Our law firm excels in securities litigation and FINRA arbitration, helping investors recover their losses. We:

Identify Fraudulent Activities: We analyze your portfolio to uncover any signs of fraud or negligence. Our team of experienced attorneys examines your investment records, communication with your advisor, and transaction history to identify any misconduct. By thoroughly investigating your case, we build a strong foundation for legal action.
Pursue Legal Action: We represent you in court and arbitration to recover your lost money. Our attorneys have extensive experience in securities litigation and FINRA arbitration. We dedicate ourselves to holding financial advisors and brokers accountable for their actions and recovering your losses.
Protect Senior Investors: We focus on protecting elderly clients from financial exploitation. Unethical advisors often target seniors because of their accumulated wealth and potential lack of financial knowledge. Our firm is committed to safeguarding seniors from fraud and ensuring they receive the justice they deserve.

Our Process

At Bakhtiari & Harrison, we follow a comprehensive process to ensure the best outcome for our clients. Our process includes:

Consultation: We offer a free initial consultation to discuss your case and understand your concerns. During this consultation, we gather information about your investments, advisor interactions, and any signs of misconduct.
Investigation: We conduct a thorough investigation of your investment portfolio, advisor communications, and transaction history. Our team identifies any instances of fraud, negligence, or unethical practices.
Legal Strategy: Based on our findings, we develop a tailored legal strategy to pursue your case. We outline the best course of action, whether it involves filing a lawsuit, pursuing arbitration, or negotiating a settlement.
Representation: We represent you throughout the legal process, whether in court or arbitration. Our experienced attorneys advocate for your rights and work tirelessly to recover your losses.
Resolution: We aim to achieve a favorable resolution for our clients, whether through a settlement, arbitration award, or court judgment. Our goal is to ensure you receive fair compensation for your losses.

Why Choose Bakhtiari & Harrison

Choosing the right law firm is crucial for recovering your investment losses. Here are a few reasons why Bakhtiari & Harrison stands out:

Experience: Our attorneys have extensive experience in securities litigation and FINRA arbitration. We have successfully represented numerous clients in complex securities fraud cases.
Commitment: We dedicate ourselves to protecting investors and holding financial professionals accountable. Our commitment to justice drives us to fight for your rights and recover your losses.
Expertise: We have experience in securities law and financial fraud. We leverage our knowledge and skills to build strong cases and achieve favorable outcomes for our clients.
Personalized Service: We provide personalized service tailored to your unique situation. We take the time to understand your concerns and develop a strategy that meets your needs.

Act to Recover Your Losses

If you have lost money due to broker misconduct, act quickly. The sooner you pursue legal action, the better your chances of recovery. Time is critical in securities fraud cases, as evidence can disappear, and statutes of limitations may expire.

Contact Bakhtiari & Harrison

At Bakhtiari & Harrison, we dedicate ourselves to protecting your investments and helping you recover from financial setbacks. For a free consultation, contact or call us at (310) 499-4732. Let our experienced California investment fraud lawyers guide you through the process and fight for your financial future.