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 Investment Fraud Attorney

Understanding Investment Fraud: Protecting Your Financial Future

Investment fraud can shatter financial stability and dreams. Whether you’re a seasoned investor or just beginning to build your portfolio, the loss of hard-earned money to fraudulent schemes is devastating. This is especially true in Los Angeles, a hub for financial opportunities and, unfortunately, for deceptive practices.

We’ll define investment fraud, provide real-life examples, share tips for protecting your financial future, and explain why contacting Los Angeles investment fraud attorneys at Bakhtiari & Harrison is the best choice for your case. You’re not alone if you’ve lost money in the stock market due to fraudulent activities. Investment fraud can impact anyone, from retirees to business owners, and recovering your losses requires expert legal guidance. If you suspect you’ve been a victim, a skilled Los Angeles investment fraud attorney can help you navigate the recovery process and seek justice.

What is Investment Fraud?

Investment fraud occurs when individuals or companies use deceptive practices to convince investors to make financial decisions that lead to monetary loss. This often involves false information, manipulation, or outright scams designed to mislead and exploit investors.

Investment fraud can take many forms, such as Ponzi schemes, insider trading, pump-and-dump scams, and broker misconduct. Regardless of the method, the result is the same: unsuspecting investors lose money while fraudsters profit. If you suspect investment fraud, contacting a qualified Los Angeles investment fraud attorney is crucial to recover your losses and hold wrongdoers accountable.

Common Types of Investment Fraud

Understanding the common types of investment fraud is the first step to protecting yourself. Here are a few examples:

Ponzi Schemes: Fraudsters promise high returns with little to no risk. Early investors may receive payouts funded by newer investors, but the scheme collapses when recruitment slows.
Insider Trading: Using confidential information to make stock trades is illegal and undermines market fairness.
Pump-and-Dump Schemes: Fraudsters artificially inflate stock prices through false claims, then sell their shares at the peak, leaving other investors with worthless stocks.
Broker Misconduct: Financial advisors may recommend unsuitable investments, fail to disclose risks, or engage in unauthorized trading.
Affinity Fraud: Scammers exploit trust within close-knit communities or organizations to promote fraudulent investments.

A Los Angeles investment fraud attorney can help investigate and pursue legal remedies if you’ve encountered any of these schemes.

Real Examples of Investment Fraud

Investment fraud has impacted countless individuals and organizations. Here are a few notable examples:

Bernie Madoff’s Ponzi Scheme: The largest Ponzi scheme in history defrauded investors of over $65 billion. Victims included individuals, charities, and institutions.
Pump-and-Dump Scandals: In 2021, social media-driven schemes inflated stock prices of lesser-known companies, leaving many investors with significant losses.
Affinity Fraud Cases: Fraudsters targeted church groups in Los Angeles, exploiting trust to promote fraudulent investments.

Tips and Reminders for Avoiding Investment Fraud

Navigating the world of investments can be complex, but these tips can help you minimize your risk:

Conduct Thorough Research: Always verify the legitimacy of investment opportunities, companies, and advisors. Check their credentials and regulatory records.
Beware of High-Pressure Tactics: Legitimate investments won’t require immediate decisions. If someone pressures you, it’s a red flag.
Diversify Your Portfolio: Don’t put all your funds into one investment. Diversification can mitigate risk.
Monitor Your Accounts: Regularly review your investment statements for unauthorized transactions or discrepancies.
Consult a Professional: If something seems too good to be true, seek advice from a trusted financial advisor or a Los Angeles investment fraud attorney providing litigation and FINRA arbitration services.

Why Bakhtiari & Harrison?

Choosing the right attorney is critical when dealing with investment fraud. At Bakhtiari & Harrison, we bring unmatched expertise and dedication to every case.

Ryan Bakhtiari

Ryan Bakhtiari is a nationally recognized investment fraud attorney with decades of experience helping investors recover losses. A former president of the Public Investors Advocate Bar Association (PIABA), Ryan is a leading voice in advocating for investor rights. His extensive knowledge of securities law and commitment to justice make him a powerful ally for clients facing financial losses due to fraud.

David Harrison

David Harrison is a skilled litigator with a deep understanding of complex financial disputes. With a career spanning high-stakes securities cases, David’s attention to detail and relentless advocacy have earned him a reputation as a trusted advocate for investors. His ability to navigate intricate legal challenges ensures clients receive the best representation.

Proven Track Record: Bakhtiari & Harrison have successfully recovered millions for defrauded investors.
Client-Focused Approach: We prioritize your needs and work tirelessly to achieve favorable outcomes.
Deep Industry Knowledge: Los Angeles investment fraud attorneys at Bakhtiari & Harrison understand the complexities of investment fraud and knows how to hold fraudsters accountable.
Personalized Service: Every case is unique, and we tailor our strategies to fit your specific circumstances.

When you choose Bakhtiari & Harrison, you gain a dedicated team that will stand by your side every step of the way.

When to Contact a Los Angeles Investment Fraud Attorney Bakhtiari & Harrison

You should contact an investment fraud attorney if:

You’ve suffered financial losses and suspect fraud.
A broker or advisor engaged in misconduct.
A financial opportunity was misrepresented to you.
You’re unsure how to recover your losses or pursue justice.

An experienced Los Angeles investment fraud attorney can guide you through the legal process, evaluate your case, and work to recover your funds. Los Angeles investment fraud attorneys at Bakhtiari & Harrison focus on helping investors reclaim their financial security.

Protecting your financial future starts with understanding your rights. If you’ve lost money in the stock market due to fraudulent practices and believe you’ve been a victim of investment fraud, contact Los Angeles investment fraud attorneys Bakhtiari & Harrison.