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.

Los Angeles FINRA Securities Attorneys: The Critical Choice of Counsel

Our team is dedicated to representing investors and financial advisors in FINRA arbitration, ensuring that your rights are protected and your interests are vigorously advocated for. Los Angeles FINRA securities attorneys at Bakhtiari & Harrison understand the complexities of the financial industry and the unique challenges faced by investors in Los Angeles’ diverse and dynamic market.

Los Angeles FINRA Securities Attorneys Serving the Diverse Communities of Los Angeles and LA County

Los Angeles is renowned for its cultural diversity, with vibrant neighborhoods like Beverly Hills, Santa Monica, Koreatown, Pacific Palisades, Brentwood, and more. This diversity enriches the city but also presents unique challenges. Unscrupulous financial advisors may exploit cultural and linguistic affinities to target investors from specific communities. Los Angeles securities attorneys at Bakhtiari & Harrison are acutely aware of these risks and are dedicated to protecting all investors, regardless of their background. Los Angeles FINRA securities attorneys at Bakhtiari & Harrison are prepared to represent you in seeking a return of your investment losses.

Understanding A Claim for Recovery

In the world of securities trading, adherence to legal and ethical standards is paramount. California has established a robust legal framework to ensure the integrity of its financial markets and protect investors from malpractices. Los Angeles FINRA securities attorneys at Bakhtiari & Harrison will delve into some common violations under the California Securities Code, including suitability, unauthorized trading, misrepresentations, failure to disclose, and unfair business advantage.

Suitability in California Securities Law

One of the fundamental principles under the California Securities Code is the requirement for investment advisers and brokers to ensure that their investment recommendations are suitable for their clients. Suitability claims are made by demonstrating that the risk taken by the financial advisor exceeds the risk threshold and appetite of the customer. A violation occurs when a broker or adviser recommends unsuitable investments, failing to consider the client’s unique circumstances. Such actions can lead to significant financial losses for the client and potential legal liability for the adviser.

Unauthorized Trading

Unauthorized trading involves executing transactions without the client’s knowledge or approval, breaching the fiduciary duty that brokers owe to their clients. This violation can result in severe financial consequences for the client and disciplinary action against the broker, including fines, suspension, or revocation of their license. Ensuring that clients are fully aware of and approve all transactions is critical to maintaining trust and compliance with California securities regulations.

Misrepresentations and Ommissions of Material Facts

Brokers and advisers are prohibited from making false statements or omitting crucial information that could affect an investor’s decision-making process. Los Angeles FINRA securities attorneys at Bakhtiari & Harrison will work to pursue your FINRA arbitration claim. Material information can include details about the financial performance of an investment, potential conflicts of interest, or any other fact that could influence an investor’s decision.

Investors rely on accurate and complete information to make informed decisions. Any deviation from this standard undermines market integrity and can lead to significant investor harm. Transparency is essential in the securities industry, and failure to uphold this standard can lead to legal action and penalties.

Common Code Violations in Trading Securities

Several other common violations under the California Securities Code relate to trading securities, including breach of fiduciary duty, breach of contract, churning or excessive activity, front-running, Ponzi schemes, due diligence failures, insider trading, and most importantly, failure to supervise the actions of a registered representative.

Understanding the FINRA Arbitration Process

The arbitration process of the Financial Industry Regulatory Authority (FINRA) is a crucial mechanism for resolving disputes in the securities industry. Los Angeles FINRA securities attorneys at Bakhtiari & Harrison have represented investors in disputes before FINRA in all 50 states as well as international investors with claims against United States-based brokerage firms. Los Angeles FINRA securities attorneys at Bakhtiari & Harrison will work to pursue your FINRA arbitration claim. FINRA arbitration provides an efficient pathway for investors to recapture losses from a FINRA member firm or a FINRA-associated member. Here’s a detailed overview of what you can expect:

Filing a Claim The process begins with the filing of a claim, detailing the nature of the dispute and the relief sought. This claim should be comprehensive, including all relevant facts, allegations, and supporting documents.
Response: The respondent, usually the brokerage firm or financial advisor, files a response to the claim. This response will address the allegations made and may include defenses and counterclaims.
Arbitrator Selection: Both parties select arbitrators from a FINRA-approved pool. The panel typically consists of three arbitrators chosen for their expertise and impartiality. Los Angeles FINRA securities attorneys at Bakhtiari & Harrison will work to slect the best possible panel of arbitrators. This selection process is critical, as the arbitrators will ultimately decide the outcome of the case.
Prehearing Conferences Initial conferences are held to establish procedural rules and schedules. These conferences help streamline the process and ensure that both parties are prepared for the hearings.
Discovery Both parties exchange relevant documents and information during the discovery phase. This phase is essential for building a strong case, as it allows both sides to gather evidence and identify key issues.
Hearings Formal hearings are conducted where evidence is presented, and witnesses may be called. During these hearings, both parties have the opportunity to present their case, cross-examine witnesses, and make legal arguments. Los Angeles FINRA securities attorneys at Bakhtiari & Harrison will represent your interests at all arbitration hearings and advocate your position to the panel of arbitrators.
Award After the hearings, the arbitrators render a binding decision. This decision, known as an award, is final and enforceable. Only limited grounds for an appeal known as a petition to vacate exist.

Why Choose Los Angeles FINRA Securities Attorneys at Bakhtiari & Harrison?

At Bakhtiari & Harrison, we bring a wealth of experience and a deep understanding of the financial industry to every case. Our commitment to our clients is unwavering, and we pride ourselves on providing personalized, effective legal representation. Whether you are an investor seeking redress for financial losses or a financial advisor navigating the complexities of FINRA arbitration, we are here to help. Los Angeles FINRA Securities Attorneys

Los Angeles’ vibrant and diverse communities are both a strength and a potential vulnerability when it comes to financial investments. At Bakhtiari & Harrison, we understand these unique dynamics and are dedicated to protecting investors from unscrupulous advisors and fraudulent schemes. Our expertise in FINRA arbitration ensures that your rights are upheld and your interests are safeguarded.

For more information or to schedule a consultation. Trust Los Angeles FINRA securities attorneys at Bakhtiari & Harrison to be your advocate in the financial world. We represent victims of financial and investment fraud throughout California, including Beverly Hills, Hidden Hills, Los Angeles, Orange County, Pacific Palisades, Palm Springs, Pasadena, San Diego, San Francisco, and other locations. Los Angeles FINRA securities attorneys at Bakhtiari & Harrison will work to pursue your FINRA arbitration claim or litigation in state or federal court.