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.

Looking FINRA CRD Expungement? 5 Steps

If you have had a disclosure on your FINRA BrokerCheck, you know how damaging it can be. It can hurt your reputation, job opportunities, and financial future. A disclosure can prevent you from getting a job as a registered representative. This can feel like FINRA is barring you from the industry. But there is hope.

FINRA has a way to permanently remove improper disclosures from your CRD. At Bakhtiari & Harrison, we focus on U5 FINRA expungements to help you clear your record. We have the experience to make it happen.

We know the FINRA expungement process. We are here to fight for you every step of the way.

Ryan Bakhtiari, a founding partner, once led the National Arbitration and Mediation Committee (NAMC) of FINRA. This group creates and approves rules, policies and procedures for FINRA arbitration, mediation, and dispute resolution.

David Harrison, another partner, has unique experience. He used to be a registered representative with Shearson Lehman Brothers. He also worked as in-house counsel at Morgan Stanley Dean Witter, where he handled disclosures.

Unfortunately, many disclosures are wrong or exaggerated. This happens because firms want to avoid FINRA sanctions for not reporting debatable allegations.

With our help, you can protect your career. Avoid disclosures that impact your profession and options in the financial industry. Contact us for more information about the FINRA expungement process.

What is U5 FINRA Expungement?

U5 FINRA expungement is a process that lets stockbrokers remove certain disclosures from their BrokerCheck and CRD records. These disclosures can relate to terminations, disciplinary actions, or customer complaints. They can hurt a registered representative’s career.

BrokerCheck is a public database. It lets potential employers and clients see your professional history, including any disclosures. By expunging these records, stockbrokers can improve their reputation and job prospects. This process is essential for those who want to keep or restore their good name in the financial industry.

Disclosures on a BrokerCheck report can be very damaging. They can block future employment due to a termination, customer dispute, or regulatory action. Employers may see these disclosures as red flags. This can lead to missed opportunities or even job loss.

Clients may also hesitate to work with a stockbroker with negative marks on their record. They might think, “Where there is smoke, there is fire.” That is why expungement is necessary. By removing these disclosures, you can show a clean, professional image and increase your options.

The expungement process is not easy. It requires a deep understanding of FINRA rules and a strategic approach. But with the right legal representation, you can successfully expunge damaging disclosures from your record.

Purpose of U5 FINRA Expungement

The main goal of U5 FINRA expungement is to give stockbrokers a fresh start. A Form U5, compared to a Form U4 is triggered when a registered representative is no longer with a firm. Expungement is a way to clear your name. It’s crucial for stockbrokers who want to maintain their credibility in the financial industry. Expungement allows you to move forward without past mistakes or misunderstandings holding you back.

For many stockbrokers, a disclosure feels like a life sentence. Even if it’s a minor issue, it can have long-lasting effects on your career. Expungement offers a chance to wipe the slate clean. You can restore your reputation and open new opportunities by successfully expunging a disclosure.

In the financial industry, your reputation is everything. A single disclosure on your BrokerCheck report can make a difference between landing a job or losing out. Expungement is more than just removing a mark from your record. It’s about protecting your future. At Bakhtiari & Harrison, we understand your reputation is important and are here to help you protect it.

Who Can Request U5 FINRA Expungement?

Not everyone can request U5 FINRA expungement. Usually, the broker or their lawyer must file the request. However certain criteria must be met for the request to be considered. For example, the disclosure must not involve serious criminal activity or fraud. Our lawyers can help you determine if you are eligible for expungement.

Not all disclosures can be expunged. FINRA has strict rules about what can and cannot be removed. Disclosures involving serious misconduct, like fraud or criminal activity, cannot be expunged. However, other disclosures, like those related to terminations or customer disputes, may be eligible for expungement.

If you are unsure whether your disclosure qualifies, our legal team can help. We will review your case and provide you with a clear assessment. If you are eligible, we will guide you through the process and fight to get your record expunged.

The U5 FINRA Expungement Process

Step 1: Reviewing the U5 Form
The first step is reviewing the U5 form. This form has the details of your termination and any related disclosures. It is important to review this information to understand what needs to be expunged and why. Our legal team will help you analyze your U5 form and find issues that can be challenged.

Step 2: Gathering Evidence
Once we know what needs to be expunged, the next step is gathering evidence to support your case. This could include emails, company records, witness statements, and more. Strong evidence is crucial for a successful expungement. Our lawyers are skilled at finding and presenting the necessary documentation.

Step 3: Filing a Request for Expungement
With the evidence in hand, we will file a formal request with FINRA. Filing this request correctly is critical, as any mistakes can delay or derail the process.

Step 4: Attending the Expungement Hearing
After the request is filed, FINRA will schedule a hearing. During this hearing, both sides will present their cases. The arbitration will then decide on the merits of the case. Our experienced lawyers will represent you at the hearing, making sure your case is presented in the best possible light.

Step 5: Follow-up and Monitoring
If the arbitration panel grants expungement in an industry-related matter, FINRA will remove the disclosure from your CRD within 30 days. If it is a customer-related matter, a court must confirm the arbitration award before expunging the disclosure.

Choosing the Right U5 FINRA Expungement Lawyer

Experience and Track Record
At Bakhtiari & Harrison, we have years of experience helping brokers clear their records. We represent clients in securities arbitration and litigation claims before FINRA and other arbitration providers. We understand the importance of your reputation, and we are here to protect it.

Client Testimonials and Reviews
Client testimonials and reviews provide valuable insights into a lawyer’s capabilities. At Bakhtiari & Harrison, we have many satisfied clients who have successfully expunged their records. Their stories can give you confidence in our ability to handle your case.

When choosing a lawyer, it is important to consider past clients’ experiences. At Bakhtiari & Harrison, we are proud of the positive feedback we’ve received. Our testimonials speak to our dedication and expertise. When you choose us, you can trust that you are in good hands.

Take Control of Your Future and U5 Issue

Do not let a disclosure hold you back. At Bakhtiari & Harrison, we are dedicated to helping you clear your record and restore your reputation. With our experienced team by your side, you can navigate the FINRA expungement process with confidence. Protect your career and future opportunities by taking the first step today. Contact us for a free consultation. Let us help you reclaim your professional standing and secure the fresh start you deserve.