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.

Filing a FINRA Complaint: A Step-by-Step Guide

Have you ever felt wronged by your stockbroker and wondered what steps you can take to address the issue? Filing a complaint with the Financial Industry Regulatory Authority (FINRA) is a step some investor take. We’ll walk you through the process of filing a FINRA complaint, ensuring you understand each step clearly. By the end, you’ll know why contacting Bakhtiari & Harrison for a FINRA complaint and arbitration claim is likely a wise decision.

Table of Contents

Understanding FINRA Complaints

FINRA is a regulatory body that oversees brokerage firms and their registered representatives. If you believe your stockbroker has engaged in misconduct, such as unauthorized trading, fraud, or other unethical practices, filing a complaint with FINRA can initiate an investigation and potentially lead to disciplinary action. This process helps you seek justice and protects other investors from similar misconduct.

Steps to File a Complaint with FINRA

Contact Your Brokerage Firm

Before filing a FINRA compalint, consider discussing your concerns with your broker or the firm’s compliance department. This step can sometimes resolve the issue without further action. Many firms have internal processes to address and rectify client complaints, which can lead to a quicker resolution.

When contacting your brokerage firm, it’s important to approach the conversation professionally and calmly. Clearly articulate your concerns and provide any supporting documentation. If the firm acknowledges the issue and offers a resolution, ensure you get this in writing. This documentation can be crucial if you need to escalate the matter to FINRA later.

Gather Documentation

Collect all relevant documents, including account statements, trade confirmations, and any correspondence with your broker. These documents will support your FINRA complaint and provide evidence of the alleged misconduct. Detailed records are crucial as they form the backbone of your FINRA complaint and help FINRA understand the context and specifics of your case.

The documentation you gather will be critical in supporting your complaint. Here’s a list of documents you should consider collecting:

Account Statements: These record all transactions and can help identify discrepancies or unauthorized trades.
Trade Confirmations: These documents confirm the details of each trade, including the date, time, and price.
Correspondence: Save all emails, letters, and notes from phone conversations with your broker. These can provide context and evidence of your communications.
Contracts and Agreements: Any contracts or agreements you have with your brokerage firm can be important in understanding the terms and conditions of your account.

Submit Your Complaint

You can file a complaint with FINRA online through their Investor Complaint Center. Provide detailed information about the issue, including the parties’ names, the transactions’ dates, and a description of the problem. The more detailed and specific your complaint, the better FINRA can investigate and address your concerns.

When you’re ready to submit your complaint to FINRA, follow these steps:

Visit the FINRA Investor Complaint Center: The online portal is user-friendly and guides you through the process of filing a complaint.
Provide Detailed Information: Include all relevant details about your complaint. Be specific about the dates, transactions, and parties involved.
Attach Supporting Documents: Upload any documents that support your complaint. This can include account statements, trade confirmations, and correspondence.
Review and Submit: Before submitting, review your complaint to ensure all information is accurate and complete.

Follow Up

After submitting your FINRA complaint, FINRA will review it and may contact you for additional information. Be prepared to cooperate fully with their investigation. This may include providing further documentation or clarifying details about your complaint. Staying engaged and responsive can help expedite the investigation process. Seek the advice of counsel at all steps if you are filing a FINRA complaint.

After submitting your FINRA complaint, it’s important to stay engaged with the process:

Monitor Your Email: FINRA may contact you for additional information or clarification. Respond promptly to any requests.
Keep Records: Maintain a record of all communications with FINRA. This can help you track the progress of your complaint.
Be Patient: Investigations can take time. While it’s important to stay engaged, be patient as FINRA conducts its review.

Why File a FINRA Complaint?

Filing a FINRA complaint can lead to various outcomes, including fines, suspensions, or even barring the broker from the industry. It also helps protect other investors from potential misconduct. By holding brokers accountable, you contribute to a more transparent and trustworthy financial market.

Filing a FINRA complaint is not just about seeking justice for yourself. It also plays a crucial role in maintaining the integrity of the financial markets. Here’s why it’s important:

Accountability: Holding brokers accountable for their actions helps maintain trust in the financial system.
Prevention: By reporting misconduct, you help prevent other investors from falling victim to similar issues.
Regulatory Oversight: FINRA Complaints provide valuable information to regulators, helping them identify patterns of misconduct and take appropriate action.

Why Contact Bakhtiari & Harrison for FINRA Complaint and Arbitration Claims?

While filing a FINRA complaint is a significant step, it may not always result in financial compensation for your losses. This is where pursuing a FINRA arbitration claim becomes crucial. At Bakhtiari & Harrison, we have extensive experience in handling FINRA arbitration claims. Our team is dedicated to helping you recover your losses and hold your broker accountable.

By choosing us, you benefit from our deep understanding of the arbitration process and our commitment to achieving the best possible outcome for our clients. Here’s why you should consider contacting us:

Experience: Our team has a proven track record of successfully handling FINRA arbitration claims. We understand the nuances of the process and can navigate the complexities on your behalf.
Personalized Service: We take the time to understand your unique situation and tailor our approach to meet your needs. You’re not just another case to us; you’re a valued client.
Commitment to Justice: We are passionate about helping our clients seek justice and recover their losses. We work tirelessly to ensure you receive the compensation you deserve.

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