Understanding Why Experience Matters in Securities Arbitration
For investors who’ve suffered financial losses due to misconduct by brokers, financial advisors, or brokerage firms, FINRA arbitration is the primary path to pursue recovery. But one of the most common — and most consequential — questions we hear is: “Do I really need a lawyer who specializes in FINRA arbitration?”
The short answer is yes. While investors technically can represent themselves, FINRA arbitration is a highly specialized legal forum with complex rules, tight deadlines, and industry-specific procedures that differ dramatically from traditional court litigation. Having an attorney who practices exclusively in securities arbitration — and who understands the nuances of FINRA’s rules and the tactics used by Wall Street firms — can be the difference between recovering your losses and walking away empty-handed.
What Makes FINRA Arbitration Different from Court
Before understanding why specialization matters, it helps to know how FINRA arbitration actually works.
The Financial Industry Regulatory Authority (FINRA) is the self-regulatory body that oversees U.S. brokerage firms and registered financial advisors. Almost every investor account agreement includes a mandatory arbitration clause, which means disputes must be resolved through FINRA rather than a public courtroom.
Unlike court:
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There is no jury; instead, a panel of one or three FINRA arbitrators decides the case.
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The rules of evidence are looser, but procedural deadlines are strict.
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Discovery is limited to a specific “Discovery Guide” — a set of documents each side must exchange.
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The final decision, known as an “arbitration award,” is binding and difficult to appeal.
Because the process is private, fast-moving, and heavily procedural, general litigators or non-specialist attorneys often find themselves at a disadvantage when facing the large national defense firms that represent brokerage houses.
Why Specialized FINRA Arbitration Attorneys Are So Effective
1. They Know the Industry — and the Defense Playbook
Brokerage firms and their lawyers handle FINRA cases every day. They understand the rules, the arbitrator pool, and how to frame a case in their favor.
An investor’s attorney must be equally familiar with:
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FINRA’s Code of Arbitration Procedure
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The Uniform Submission Agreement and discovery rules
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SEC regulations and state blue-sky laws
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Patterns of broker misconduct, from unsuitable recommendations to unauthorized trading, churning, or failure to supervise
Attorneys who specialize in this field can quickly identify how a broker’s actions violated specific industry rules — and can explain those violations in a way arbitrators find compelling.
2. They Know How to Select Arbitrators Strategically
FINRA gives each side lists of potential arbitrators and allows ranking and striking based on background, prior awards, and perceived fairness.
An experienced securities lawyer knows:
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Which arbitrators tend to favor investors versus industry respondents
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How to analyze past award data and decision trends
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When to request a public chairperson rather than an industry panelist
This knowledge can dramatically influence outcomes, especially in close factual disputes.
3. They Build the Case Around Damages and Causation
In FINRA arbitration, proving misconduct isn’t enough — you must also prove causation and quantifiable loss.
Specialized attorneys work with forensic accountants and industry experts to:
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Reconstruct trading records
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Identify overconcentration or unsuitable investment strategies
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Calculate net-out-of-pocket losses, opportunity cost, or market-adjusted damages
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Present a clear, digestible financial narrative to the arbitrators
Without this kind of expert-driven analysis, investors often underestimate the true size of their losses or fail to connect them legally to the broker’s misconduct.
4. They Understand How to Leverage Discovery and Evidence
The FINRA Discovery Guide is unique. It outlines what documents each side must provide — but the best attorneys go beyond the minimum.
They know how to request emails, compliance logs, exception reports, and trade blotters that reveal patterns of negligence or supervision failures.
A generalist might not know that a single “customer profile update” form or “branch compliance memo” could make or break the case.
Specialists do.
5. They Know When (and How) to Settle
Roughly 70–80% of FINRA cases settle before final hearing.
Experienced securities lawyers can evaluate the strength of the claim, analyze comparable awards, and negotiate effectively with defense counsel.
They understand what a reasonable settlement range looks like based on prior cases, claim size, and arbitrator composition — avoiding premature settlements that undervalue the investor’s losses.
6. They Prepare You for Testimony and the Hearing
A FINRA arbitration hearing feels less formal than a courtroom, but the stakes are the same.
Investors must testify under oath before arbitrators who often have financial or legal backgrounds.
A seasoned arbitration lawyer will:
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Conduct mock examinations to prepare you for cross-examination
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Refine your testimony to focus on facts, not emotion
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Anticipate the defense’s strategy and objections
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Manage expert witnesses, opening statements, and closing arguments
Because arbitrations are one-and-done, this preparation ensures your story is told clearly and credibly.
The Risks of Going It Alone or Using a General Litigator
While some investors consider handling their cases pro se (without counsel) or hiring a general civil litigator, doing so carries major risks:
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Missed procedural deadlines — FINRA filings, motion responses, and discovery obligations follow strict timelines.
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Incomplete document requests — without knowing FINRA’s categories of presumptively discoverable documents, key evidence may never surface.
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Misunderstanding damages — many investors claim only their initial loss without including opportunity costs or margin interest impacts.
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Inexperienced arbitrator selection — choosing the wrong panel can bias the process from the start.
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No appeal safety net — because FINRA awards are binding, there’s no “second chance” to fix mistakes later.
In short: experience isn’t optional — it’s essential.
What to Look for in a FINRA Arbitration Lawyer
When evaluating law firms, investors should ask:
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How many FINRA arbitration cases has your firm handled?
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Do you represent only investors — or also brokerage firms?
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What is your experience with large-loss or complex product cases?
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Have you taken cases to final hearing, and what were the outcomes?
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Do you work on a contingency fee basis?
Specialized firms like Bakhtiari & Harrison focus exclusively on representing investors, retirees, and high-net-worth individuals in securities disputes nationwide.
Their attorneys have argued hundreds of arbitration claims involving stocks, bonds, options, REITs, structured products, private placements, and alternative investments — giving them insight into both the legal and financial aspects of every case.
Common Misconceptions About FINRA Arbitration Attorneys
“I can’t afford one.”
Most investor lawyers work on a contingency fee basis, meaning they only collect if you recover. This aligns the attorney’s interests with yours and allows investors to pursue claims without paying hourly fees.
“All lawyers are the same.”
Not in securities arbitration. FINRA’s rules, arbitrator databases, and evidentiary standards are unique — so even a top trial lawyer without FINRA experience may be at a disadvantage.
“My losses weren’t big enough.”
Even smaller claims (under $100,000) can be heard by a single arbitrator, often in a paper-only “Simplified Arbitration” process. A securities attorney can tell you whether your claim qualifies and help you file efficiently.
The Value of a Specialized Law Firm
At Bakhtiari & Harrison, our attorneys have decades of experience holding brokerage firms accountable for investor losses.
We don’t just know the law — we know the tactics, the rules, and the players.
We have recovered millions for investors nationwide through FINRA arbitration, mediation, and negotiation.
Our approach emphasizes:
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Individualized strategy: every client’s financial situation and investment history is unique.
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Thorough case investigation: we analyze statements, internal records, and trade confirmations to uncover the full story.
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Trial-ready preparation: even if a case settles, we prepare as though it will go to hearing.
When facing the largest Wall Street firms, investors deserve lawyers with equal experience and determination.
Frequently Asked Questions About Hiring a FINRA Arbitration Lawyer
How do attorney fees work?
Most firms, including ours, handle cases on a contingency fee. That means no upfront cost — you pay only if we recover funds for you.
Can I use my regular financial advisor as an expert witness?
Sometimes, but expert testimony in arbitration must meet FINRA’s standards for independence and qualification. Specialized attorneys maintain relationships with recognized industry experts who strengthen your case.
What if my broker has already been disciplined by FINRA?
Prior disciplinary history can support your claim, but it’s not automatically admissible. A seasoned lawyer can determine whether to request BrokerCheck records, enforcement actions, or prior awards to bolster your case.
How do I start a FINRA arbitration?
Your attorney will file a Statement of Claim with FINRA, outlining the facts, legal basis, and damages sought. The firm then files an Answer, and the case proceeds to discovery, hearings, or mediation.
Why Investors Choose Bakhtiari & Harrison
Investors choose Bakhtiari & Harrison because we combine deep regulatory knowledge with a track record of results.
We have represented sophisticated investors, retirees, athletes, and entrepreneurs against every major brokerage firm, recovering damages for negligence, fraud, unsuitable recommendations, and breach of fiduciary duty.
When you entrust us with your case, we commit to:
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Listening first. We take time to understand how your investments fit into your overall financial life.
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Educating you throughout the process. We explain each stage of arbitration and what to expect.
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Fighting for full recovery. Whether through settlement or final award, our goal is to restore your financial security.
Take the First Step Toward Recovery
If you believe your broker’s misconduct caused losses in your investment portfolio, don’t wait.
Deadlines for filing FINRA claims — known as eligibility periods — can bar your case if you delay.
Contact Bakhtiari & Harrison today for a confidential consultation. Our securities lawyers can evaluate your case, explain your rights, and guide you through every step of the FINRA arbitration process.
Your financial future deserves a firm that knows how to protect it.