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.

What is an Arbitration Lawyer?

An arbitration lawyer is a legal professional who specializes in representing clients during arbitration proceedings. Arbitration is a way to resolve disputes without going to court. In this method, the parties agree to settle their conflict.

They often get help from a neutral arbitrator or a panel. Experienced counsel helps clients navigate the process. They advocate for their clients’ best interests. They also ensure that the arbitration is fair. This type of lawyer is very important in fields like finance, employment, construction, and international business. In these areas, contracts often include arbitration clauses.

It is important to understand what an arbitration lawyer does. Knowing their role in the process can help individuals or businesses in a dispute. An arbitration lawyer can provide valuable benefits during arbitration.

Understanding the Role of an Arbitration Lawyer

Experienced counsel serve as advocates and advisors for their clients throughout the arbitration process. Their main job is to protect their clients’ legal rights. They work to achieve the best outcome for individuals, businesses, or organizations. Unlike courtroom litigation, arbitration is usually a simpler and less formal process. However, it still needs special legal knowledge and skills.

Key Responsibilities of an Arbitration Lawyer:

Case Preparation: Arbitration lawyers are responsible for preparing a comprehensive case on behalf of their clients. This includes gathering evidence, preparing witness testimonies, analyzing contracts or agreements, and identifying key legal issues. Their goal is to build a solid foundation for the arbitration hearing.
Advising Clients: Before entering arbitration, an arbitration lawyer provides legal advice on the strengths and weaknesses of the case, the likelihood of success, and potential outcomes. This helps clients make informed decisions about whether to proceed with arbitration or explore other options, such as settlement.
Drafting and Filing Claims: In the arbitration process, legal claims or defenses must be clearly articulated. Arbitration lawyers handle the drafting and filing of these claims, which set the stage for the arbitration proceedings. They ensure that all relevant facts and legal arguments are presented accurately and effectively.
Representation During Hearings: During the arbitration hearing, the lawyer represents their client by presenting evidence, questioning witnesses, and delivering legal arguments. Their role is similar to that of a trial attorney in court, but arbitration hearings are typically less formal.
Negotiating Settlements: In some cases, arbitration may lead to settlement discussions between the parties. Arbitration lawyers can play a crucial role in negotiating favorable settlements for their clients, either before or during the arbitration process.
Enforcing or Challenging Arbitration Awards: Once an arbitration award is issued, it is legally binding. However, in certain situations, the award may need to be enforced through the courts, or there may be grounds to challenge the award. Arbitration lawyers assist with these post-hearing actions, ensuring that their clients’ interests are fully protected.

When Do You Need an Arbitration Lawyer?

An arbitration lawyer is necessary whenever an individual or business is involved in an arbitration proceeding and needs legal representation. Arbitration can occur in various contexts, such as securities disputes, employment contracts, real estate matters, or commercial transactions. Here are some common situations where hiring an arbitration lawyer is essential:

Securities Arbitration: In the financial industry, arbitration is commonly used to resolve disputes between investors and brokers. If you lost money due to broker misconduct, such as bad investments or unauthorized trading, a lawyer can help. They can assist you in recovering your losses through arbitration. They can assist you in recovering your losses through FINRA arbitration.
Employment Disputes: Many employment contracts include mandatory arbitration clauses for resolving disputes related to wrongful termination, discrimination, or harassment. In these cases, an arbitration lawyer helps protect employees’ rights or defend employers against claims.
Commercial and Contractual Disputes: Businesses often include arbitration clauses in contracts to streamline the resolution of conflicts. When facing a breach of contract, supplier dispute, or other business problems, an arbitration lawyer helps manage the process. They ensure everything is done fairly and efficiently.
Construction and Real Estate Disputes: The construction industry often uses arbitration to solve problems. These problems can include delays, defects, or payment issues. An arbitration lawyer helps contractors, developers, and property owners navigate these disputes effectively.

The Benefits of Working with an Arbitration Lawyer

Hiring an arbitration lawyer provides several advantages when navigating the arbitration process. Arbitration is less formal than litigation, but it is still a complex legal process. Having a skilled attorney with you can make a big difference.

Key Benefits:

Expert Guidance: Arbitration lawyers have in-depth knowledge of the arbitration process, rules, and strategies. They can guide clients through each step, ensuring that all legal requirements are met and that the case is presented effectively.
Stronger Case Presentation: Lawyers specializing in arbitration understand how to structure and present a case in a way that is persuasive to arbitrators. This includes selecting the right evidence, making compelling legal arguments, and effectively cross-examining witnesses.
Time and Cost Savings: Arbitration is typically quicker and more cost-effective than traditional court litigation. However, having an experienced lawyer can further streamline the process, helping clients avoid unnecessary delays or costs.
Negotiation: Resolve many arbitration cases through negotiation before the final hearing. An arbitration lawyer’s negotiation skills can help clients get good settlements. This can happen without a long arbitration process.
Ensuring Fairness: While arbitration is designed to be a fair process, there can still be risks of bias or procedural errors. An arbitration lawyer ensures that their client’s rights are upheld and that the arbitration is conducted fairly.
Enforcement and Appeal Support: After an arbitration award is issued, enforcing or challenging the award may require additional legal action. Arbitration lawyers assist with post-arbitration issues. They help clients get the compensation they deserve or defend against unfair awards.

Should You Hire an Arbitration Lawyer?

If you are facing an arbitration proceeding, hiring an arbitration lawyer is often in your best interest. Some people might think they can handle the process without a lawyer.

However, arbitration can be complicated, and the risks are often significant. An experienced arbitration lawyer can boost your chances of a good outcome. They will also protect your rights during the process.

Whether you’re involved in a securities dispute, employment arbitration, or a business conflict, having an arbitration lawyer by your side can make a significant difference. If you’re facing arbitration and need legal support, contact Bakhtiari & Harrison to discuss your case. We can help you understand your rights, build a strong case, and achieve the best possible resolution for your situation.