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.

Reasons an Experienced FINRA Expungement Lawyer is Critical

Having a clean record is crucial for your reputation and career in the financial industry. If you have negative marks on your FINRA BrokerCheck, it can affect your opportunities for future employment and damage your credibility with investors. This is where a FINRA expungement lawyer can help. FINRA expungement is the process of removing harmful or inaccurate information from your FINRA BrokerCheck record. This can include customer complaints, disciplinary actions, or other damaging marks that could harm your professional reputation.

Importance of a FINRA Expungement Lawyer

A FINRA expungement lawyer is essential to navigate the complex expungement process and maximize your chances of success. They have the expertise and knowledge of FINRA rules and regulations to effectively represent you in FINRA hearings and negotiate with opposing parties.

FINRA expungement is the process of removing negative or inaccurate information from your FINRA BrokerCheck record. This can be crucial for financial professionals, individuals with a record on their FINRA BrokerCheck, and investors to maintain their credibility and protect their investments.

Reasons for Seeking FINRA Expungement

There are various reasons why someone may seek FINRA expungement, including correcting inaccuracies, removing unfair complaints, or protecting their professional reputation. It can also help individuals improve their chances of future employment opportunities and maintain their credibility with investors.

Correcting Inaccuracies: Often, the information recorded in the FINRA BrokerCheck system might not accurately represent the incident. There could be errors or misunderstandings that need rectification to avoid undue damage to your professional standing.
Removing Unfair Complaints: Not all complaints lodged against financial professionals are justified. Some might be the result of misunderstandings, malice, or customer dissatisfaction unrelated to any wrongdoing. Removing these unfair complaints is crucial for maintaining a clean record.
Protecting Professional Reputation: In the highly competitive financial industry, reputation is everything. A single negative mark can tarnish your reputation, leading to a loss of clients and opportunities. By seeking expungement, you can ensure that your record accurately reflects your professional conduct.

Process of FINRA Expungement

The process of FINRA expungement involves several critical steps:

Filing a Petition with FINRA: The first step is to file a petition for expungement with FINRA. This petition should clearly outline the reasons why the expungement is being sought and provide supporting documentation.
Gathering Evidence: To support your case, you must gather evidence substantiating your claims. This could include documents, witness statements, and any other relevant information that can help prove that the negative mark is unjustified or incorrect.
Presenting Your Case in a FINRA Hearing: Once your petition is filed and evidence gathered, you will need to present your case in a FINRA hearing. This is where having a FINRA expungement lawyer is invaluable, as they can effectively present your arguments and advocate on your behalf.
FINRA Decision: After the hearing, FINRA will make a decision on whether to grant the expungement. This decision is based on the evidence and arguments made during the hearing.

Experience and Track Record of Counsel is Important

Choose a lawyer with experience handling FINRA expungement cases and a track record of success in helping clients remove negative marks from their records. An experienced lawyer will know these cases’ common pitfalls and best practices.

Look for a lawyer who focuses on FINRA expungement cases and profoundly understands the process and requirements involved. Concentrating on these cases ensures that the lawyer is up-to-date with the latest regulations and procedural nuances.

Ensure that your lawyer is communicative, responsive, and available to address your concerns and provide updates on your case. Good communication is essential for a smooth and stress-free process.

Discuss fees and payment structure upfront to avoid surprises and ensure you are comfortable with the financial arrangement. Some lawyers might offer flexible payment plans or contingency-based fees.

Impact on Future Career Prospects

Negative marks on your FINRA BrokerCheck record can severely impact your career prospects. Employers in the financial industry often review these records as part of their hiring process. A clean record can open doors to new opportunities, promotions, and higher salary potential. Conversely, unresolved negative marks can limit your career growth and restrict your professional development.

Clients rely on financial advisors to manage their investments and provide sound financial advice. Trust is a cornerstone of these relationships. If your clients see negative information on your BrokerCheck report, it can erode their trust and confidence in your abilities. By seeking a FINRA expungement, you can ensure that your record accurately reflects your professionalism and integrity, thereby maintaining and enhancing client relationships.

Legal and Regulatory Compliance

Financial professionals must adhere to strict legal and regulatory standards. Negative marks on your record can indicate non-compliance with these standards, leading to additional scrutiny from regulatory bodies. Ensuring that your record is accurate and free from unjust negative marks can help you stay in good standing with regulatory authorities and avoid further complications.

Your professional reputation is closely tied to your personal reputation, especially in the financial industry, where personal branding is crucial. Negative marks on your FINRA record can spill over into your personal life, affecting your social and professional networks. A FINRA expungement lawyer can help you protect your personal reputation by ensuring that only accurate and fair information is displayed on your BrokerCheck report.

Long-Term Financial Benefits

Investing in a FINRA expungement lawyer can have long-term financial benefits. By clearing your record, you can enhance your career prospects, which can lead to higher earnings and better job security. Maintaining a clean record can also help you avoid potential legal and financial liabilities associated with negative marks.

Navigating the intricacies of the FINRA expungement process can be daunting without the right expertise. A dedicated FINRA expungement lawyer can provide you with the necessary support and guidance to clear your record and safeguard your professional future. By understanding the process, benefits, and the right criteria for choosing a lawyer, you can make informed decisions that will have lasting positive effects on your career and reputation in the financial industry. Taking proactive steps today can lead to a brighter, more secure tomorrow in your professional journey.

Importance of Seeking Professional Legal Help for FINRA Expungement

Seeking professional legal help for FINRA expungement is crucial to navigating the complex process and maximizing your chances of success. A FINRA expungement lawyer has the expertise and knowledge to represent you and protect your professional reputation effectively.

Hiring a FINRA expungement lawyer offers several benefits, including expertise in FINRA rules and regulations, assistance with gathering and organizing evidence, representation in FINRA hearings, negotiations with opposing parties, and maximizing your chances of a successful outcome. These benefits can significantly improve your professional and personal life by ensuring that your record accurately reflects your integrity and professionalism.

If you have negative marks on your FINRA BrokerCheck, consider hiring a FINRA expungement lawyer to help you navigate the expungement process and protect your professional reputation. Look for a lawyer with experience, focus, good communication, and positive client reviews.