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 Securities Fraud Attorneys: Protecting Your Investments

Securities fraud can disrupt your financial stability and leave you feeling helpless. If you’ve been misled or deceived in an investment, understanding your legal rights is crucial. Los Angeles securities fraud attorneys at Bakhtiari & Harrison are here to help individuals and businesses navigate these complex issues. In this blog, we will explore how attorneys address securities fraud, common types of fraud, and how Bakhtiari & Harrison can assist you in recovering your losses and holding wrongdoers accountable.

What Is Securities Fraud?

Securities fraud occurs when someone deceives an investor to manipulate the market or secure financial gain. These fraudulent acts can involve false statements, insider trading, unauthorized trades, or schemes that inflate stock prices artificially. Victims of securities fraud often face significant financial losses and must act quickly to address the harm.

Los Angeles, as a global financial hub, witnesses a variety of securities fraud cases. Whether you’re an individual investor, a business owner, or part of a financial institution, having legal representation in these situations is critical to protecting your interests.

Common Types of Securities Fraud

Understanding the types of securities fraud can help you identify whether you’ve been a victim. Here are some of the most common forms:

1. Ponzi and Pyramid Schemes

Fraudsters promise high returns with little risk, using new investors’ money to pay earlier investors. These schemes collapse when there are no new investments.

2. Insider Trading

This occurs when individuals trade stocks or securities based on non-public, material information. This practice is illegal and undermines market integrity.

3. Misrepresentation or Omission

Providing false or incomplete information about securities can lead investors to make decisions based on inaccurate data.

4. Unauthorized Trading

A broker who makes trades on your account without your consent is violating your trust and legal rights.

5. Market Manipulation

Schemes that inflate or deflate stock prices to deceive investors are a direct violation of securities laws.

6. Churning

This involves excessive trading by brokers to generate commissions, often to the detriment of the investor.

These are just a few examples of securities fraud. If you suspect you’ve been a victim, legal counsel can help you evaluate your situation and take the next steps.

How Los Angeles Securities Fraud Attorneys Assist Harmed Investors

Addressing securities fraud requires legal acumen and an in-depth understanding of financial regulations. Here are the ways a Los Angeles securities fraud attorney can help:

Investigating the Case

Los Angeles securities fraud attorneys will review the details of your case, analyze financial records, and identify any signs of illegal activity. This investigation lays the groundwork for building a strong case.

Explaining Your Legal Options

Federal and state laws regulate securities, including the Securities Act of 1933 and the Securities Exchange Act of 1934. An attorney will interpret how these laws apply to your case and guide you through the available legal options.

Filing Claims and Lawsuits

Depending on the circumstances, you may need to file a claim with regulatory bodies like the Securities and Exchange Commission (SEC) or pursue a lawsuit against the responsible party. Your attorney will handle the paperwork, legal arguments, and negotiations.

Representing You in Arbitration or Litigation

If your case involves arbitration through the Financial Industry Regulatory Authority (FINRA) or litigation in court, your attorney will advocate for you. They will present evidence, question witnesses, and make legal arguments to seek justice.

Recovering Financial Losses

The ultimate goal of legal action is to recover your financial losses. Whether through a settlement, arbitration award, or court judgment, your Los Angeles securities fraud attorney will work to secure the compensation you deserve.

Choosing the Right Los Angeles Securities Fraud Attorney

When selecting legal representation, you want a team with extensive knowledge of securities fraud laws and a commitment to client advocacy. In Los Angeles, the bustling financial markets mean that fraud cases can be particularly complex. Attorneys must have the skills to address these challenges effectively.

At Bakhtiari & Harrison, we approach every case with dedication and a focus on achieving results. We understand the emotional and financial impact securities fraud can have, and we are here to guide you through this challenging time.

Why Work with Bakhtiari & Harrison?

Los Angeles securities fraud attorneys at Bakhtiari & Harrison have a track record of helping clients recover from securities fraud. Our team is well-versed in the nuances of securities laws, FINRA rules and regulations and is committed to delivering personalized attention to each case.

Here’s what sets Los Angeles securities fraud attorneys at Bakhtiari & Harrison apart:

In-Depth Knowledge: Our team stays current with the latest developments in securities law and financial regulations.
Client-Centered Approach: We prioritize understanding your unique situation and tailoring our strategies to meet your needs.
Proven Results: We’ve helped numerous clients recover their losses and hold fraudulent parties accountable.
Clear Communication: We keep you informed at every stage, ensuring transparency and trust.

When you choose Bakhtiari & Harrison, you’re not just hiring legal representation—you’re gaining a dedicated advocate who will stand by your side every step of the way. If you believe you’ve been a victim of securities fraud, don’t wait to take action. Time is often a critical factor in these cases, and delaying could limit your ability to recover losses. Contact Los Angeles securities fraud attorneys at Bakhtiari & Harrison today to schedule a consultation. Let us help you navigate the complexities of securities fraud cases and work toward the justice and compensation you deserve.

Your financial future is worth defending—let Los Angeles securities fraud attorneys at Bakhtiari & Harrison help you take the first step. Call us now or visit our website to get started.