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.

Empowering Women in Finance: Addressing Sexual Harassment and the Importance of Compliance

In the high-stakes world of finance, women continue to break barriers and excel as stock brokers and financial advisors. Yet, despite their significant contributions, many women in the industry face a pervasive issue: sexual harassment. When brokerage firms fail to prevent wrongful conduct or lack appropriate compliance resources, it can create a hostile work environment that undermines their success and well-being.

At Bakhtiari & Harrison, we represent financial advisors in employment matters, including those involving sexual harassment. We understand the unique challenges women face in the financial industry and are committed to advocating for their rights and ensuring they have a safe, respectful workplace.

Understanding Sexual Harassment in the Financial Industry

Sexual harassment in the workplace can take many forms, including unwelcome sexual advances, inappropriate comments or jokes, and other conduct of a sexual nature that creates an intimidating, hostile, or offensive work environment. In the financial industry, where power dynamics and high-pressure environments are common, such behaviors can be particularly insidious and damaging.

Women stock brokers and financial advisors often encounter these challenges in various ways:

Subtle Intimidation: Inappropriate comments or jokes that demean women, making them feel undervalued and unwelcome.
Quid Pro Quo Harassment: Instances where career advancement or job security is contingent upon accepting or tolerating unwanted sexual advances.
Hostile Work Environment: Persistent and pervasive conduct that makes the workplace unbearable, affecting job performance and mental health.

The Role of Brokerage Firms in Preventing Harassment

Brokerage firms have a legal and ethical responsibility to prevent sexual harassment and ensure a safe work environment. This includes implementing comprehensive policies, providing regular training, and establishing clear reporting procedures. However, not all firms take these obligations seriously, leaving employees vulnerable.

Signs Your Firm May Lack Proper Compliance Resources

If you’re experiencing sexual harassment and your firm does not address your concerns adequately, it may be indicative of broader compliance issues. Here are some signs that your brokerage firm may lack proper compliance resources:

Inadequate Policies: The firm does not have a clear, written policy against sexual harassment or fails to communicate it effectively to employees.
Lack of Training: There is no regular training on recognizing and preventing sexual harassment, or the training provided is superficial and ineffective.
Ineffective Reporting Mechanisms: The process for reporting harassment is unclear, complicated, or discourages victims from coming forward.
Retaliation: Employees who report harassment face retaliation, such as demotion, dismissal, or further harassment.

Your Rights as a Financial Professional

As a stock broker or financial advisor, you have the right to a workplace free from sexual harassment and retaliation. Laws such as Title VII of the Civil Rights Act of 1964 protect employees from discrimination based on sex, which includes sexual harassment. Additionally, many states have specific laws that offer further protections and remedies for victims of workplace harassment.

How Bakhtiari & Harrison Can Help

At Bakhtiari & Harrison, we are dedicated to representing women in the financial industry who face sexual harassment and other employment challenges. Our experienced attorneys understand the complexities of employment law and the unique dynamics of the financial sector. Here’s how we can assist you:

Confidential Consultation: We offer confidential consultations to discuss your situation and explore your options. We understand the sensitive nature of these issues and prioritize your privacy and well-being.
Comprehensive Representation: Our team provides comprehensive legal representation, from filing complaints with regulatory bodies to pursuing litigation if necessary. We are skilled negotiators and litigators, prepared to fight for your rights at every stage.
Support and Advocacy: Beyond legal representation, we offer support and advocacy, connecting you with resources to help you cope with the emotional and psychological impact of harassment. We are committed to empowering you to reclaim your career and your life.
Compliance Audits: We work with brokerage firms to conduct compliance audits and develop robust policies and training programs to prevent sexual harassment and foster a respectful workplace culture.

Taking Action: Steps You Can Take

If you are experiencing sexual harassment at your brokerage firm, taking action can feel daunting. Here are some steps you can take to protect yourself and your rights:

Document Everything: Keep detailed records of the harassment, including dates, times, locations, and descriptions of the incidents, as well as any witnesses. This documentation will be crucial if you decide to file a complaint.
Report the Harassment: Follow your firm’s reporting procedures to report the harassment. If your firm does not take appropriate action, or if you fear retaliation, seek legal advice.
Seek Legal Counsel: Contact an experienced employment attorney, such as those at Bakhtiari & Harrison, to discuss your options and ensure your rights are protected.
Know Your Rights: Familiarize yourself with the laws and regulations that protect you from sexual harassment and retaliation. Understanding your rights can empower you to take action and seek justice.

Conclusion: Advocating for Change in the Financial Industry

Sexual harassment should never be tolerated in any workplace, and the financial industry is no exception. By addressing this issue head-on and advocating for stronger compliance measures, we can create a safer, more inclusive environment for women in finance.

At Bakhtiari & Harrison, we are proud to stand with women stock brokers and financial advisors, providing the legal support and advocacy needed to combat sexual harassment and promote a culture of respect and equality. If you or someone you know is facing harassment, don’t hesitate to reach out to us at www.bhseclaw.com. Together, we can work towards a brighter, more equitable future in the financial industry.