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 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.

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.

California Securities Attorneys, Critical Information for Harmed Investors

Imagine trusting your financial advisor with your hard-earned savings, believing they have your best interests at heart, only to find out that they have engaged in unethical practices that resulted in significant financial loss. This is the unfortunate reality for many California residents who have invested in the stock market through their stockbroker or financial advisor. California securities attorneys at Bakhtiari & Harrison, we understand the frustration and betrayal felt by investors in such situations, and we are committed to fighting for justice and recovering your losses.

Table of Contents

The Investor’s Problem

Losing money in the stock market is always painful, but it becomes even more devastating when the loss is due to the misconduct or negligence of a trusted financial advisor or stockbroker. The emotional toll and financial impact can be overwhelming. California securities attorneys at Bakhtiari & Harrison recognize these challenges and empathize with the plight of investors who have been wronged.

Frequent instances of misconduct by stockbrokers or financial advisors that breach industry regulations and state or federal securities laws include

Recommending Unsuitable Investments: Advisors may advocate for excessive risks by promoting investments that are not aligned with the client’s financial objectives, risk tolerance, or comprehensive investment strategy.
Misrepresenting Material Facts About an Investment: Advisors may engage in deceptive practices by offering misleading or incomplete information about an investment, leading clients to make uninformed decisions that could expose them to significant risks, especially when dealing with abusive stock brokers.
Churning: Excessive trading in a client’s account to generate commissions without regard for the client’s investment objectives.
Unauthorized Trading: Executing trades without the client’s consent or knowledge, which can often be classified as broker theft.
Front Running: Trading ahead of clients to benefit from market movements.
Ponzi Schemes: Fraudulent investment schemes where returns are paid to earlier investors from new investors’ funds.
Failure to Conduct Proper Due Diligence on Securities: Firms may fail to effectively research and evaluate investments, such as private offerings, before recommending them to clients, which constitutes a breach of their regulatory responsibilities.
Lack of Risk Management: Failure to properly assess and manage the risks associated with an investment.
Lack of Asset Allocation: Inadequate diversification of investments, which can elevate risk and result in increased potential for financial losses, breaches the fiduciary duty that advisors owe to their clients.
Affinity Fraud: Investment scams frequently target specific groups, such as ethnic or religious communities, professional organizations, and social clubs. These stockbrokers and financial advisors often leverage their ties to these groups by masquerading as members or by gaining the trust of a well-respected individual within the community to endorse their deceptive schemes. Unfortunately, countless individuals who become victims of such fraud ultimately face significant financial setbacks. California securities attorneys at Bakhtiari & Harrison represent investors.

The Need for Action

Failing to address the issue of financial advisor or stockbroker misconduct can have severe consequences. Continued financial losses, emotional distress, and a lack of accountability for wrongdoers can leave investors feeling helpless and defeated. It is crucial to take action to protect your financial future and hold those responsible accountable.

A California securities attorney plays a vital role in helping investors navigate the complex legal landscape and recover their losses. By taking legal action, investors can seek justice, recover their funds, and ensure that unethical advisors and brokers are held accountable for their actions. California securities attorneys at Bakhtiari & Harrison represent investors.

Introducing Bakhtiari & Harrison

California securities attorneys at Bakhtiari & Harrison are dedicated to advocating for the rights of individual investors who have experienced losses due to the misconduct of their financial advisors or stockbrokers. Our firm has a robust history of pursuing justice, ensuring that those in trusted positions are held accountable for their actions. If you find yourself a victim of investment misconduct, our experienced California securities attorneys are here to help you navigate your legal options and seek the compensation you deserve. California securities attorneys at Bakhtiari & Harrison represent investors.

About the Firm

California securities attorneys at Bakhtiari & Harrison are a trusted law firm dedicated to safeguarding the rights of investors. Our mission is to offer compassionate and effective legal representation for individuals who have experienced financial losses stemming from the misconduct of their financial advisors or stockbrokers, particularly in the context of securities disputes. We also believe in giving back to the community and being ambassadors of goodness. California securities attorneys at Bakhtiari & Harrison represent investors. Our firm is actively involved in various community initiatives and strives to make a positive impact on society.

Extensive Experience

Our team of seasoned securities California securities attorneys brings five decades of experience in effectively representing clients in intricate securities litigation and arbitration cases. Throughout these years of practice, we have assisted numerous investors and hedge funds in recovering their losses and obtaining justice. We have taken decisive actions against securities firms on behalf of victims of investment fraud, ensuring that their rights are protected, and their claims are heard.

Our California securities attorneys have been recognized with many distinguished awards throughout their careers, including the prestigious Super Lawyers designation for the previous 15 years. This proficiency in securities law, combined with our unwavering dedication to our clients, makes us the ideal choice for investors seeking effective legal representation. California securities attorneys at Bakhtiari & Harrison represent investors.

The Path to Justice

California securities attorneys at Bakhtiari & Harrison, we have developed a streamlined process to provide legal advice and help investors seek justice and recover their losses. Here is a step-by-step guide to our approach:

Initial Consultation

The first step in addressing your securities litigation issues is to schedule a free consultation with our team. During this initial meeting, we will carefully review the details of your case, listen to your concerns, and provide an insightful assessment of your situation. This consultation serves as an opportunity for you to explore your legal options and pose any questions you may have. California securities attorneys at Bakhtiari & Harrison represent investors.

Case Evaluation

Following the initial consultation, our team will perform a comprehensive assessment of your case. We will collect and scrutinize all pertinent evidence, such as account statements, communications, and transaction details. Our objective is to ascertain the viability of your case and pinpoint the most effective strategies to pursue, empowering you to make well-informed decisions as you proceed. Depending on the specifics of the case, we may operate under a contingency fee structure, an hourly rate, or a combination of both options. California securities attorneys at Bakhtiari & Harrison represent investors.

Legal Action

If we find that your case has merit, we will move forward by filing claims and initiating legal action on your behalf. This could involve either litigation or arbitration, potentially through the Financial Industry Regulatory Authority (FINRA) or other arbitral venues like the American Arbitration Association, as well as state or federal courts. Our team is dedicated to managing every facet of the legal process, from preparing essential legal documents to representing you vigorously in court or during arbitration hearings.

The FINRA Arbitration Process

When pursuing legal action through FINRA, it is essential to understand the arbitration process. FINRA arbitration is a common method for resolving disputes between investors and financial advisors or brokerage firms. The process is designed to be efficient, fair, and less formal than traditional courtroom litigation.

Filing a Claim

The first step in the FINRA arbitration process is to file a claim, also known as a Statement of Claim. This document outlines the details of the dispute, the alleged misconduct, and the damages being sought. Once the claim is filed, the respondent (the financial advisor or brokerage firm) has a specified period to respond with their Statement of Answer.

Selection of Arbitrators

Once the claim and response are submitted, both parties move forward by selecting a panel of arbitrators from a list provided by FINRA. These arbitrators, who often have extensive expertise in securities, serve as neutral third parties tasked with reviewing the case and delivering a final decision.

The panel typically comprises one to three arbitrators, chosen based on the complexity and significance of the dispute. With substantial experience in arbitration, our California securities attorneys are adept at meticulously evaluating and narrowing down the options within the arbitral pool, ensuring that the most qualified panel is selected for your case. California securities attorneys at Bakhtiari & Harrison represent investors.

Discovery Phase

During the discovery phase, both parties exchange relevant documents and information related to the case. This phase allows each side to gather evidence and build their arguments. It is essential to be thorough and transparent during this process to ensure a fair and accurate presentation of the facts.

Pre-Hearing Conferences

Before the evidentiary hearing, the arbitrators may schedule pre-hearing conferences to discuss procedural matters, set deadlines, and address any preliminary issues. These conferences help streamline the process and ensure that both parties are prepared for the hearing.

Mediation

In many cases, parties agree to mediate the case approximately two months before the evidentiary hearing. Mediation is a voluntary process where a neutral mediator helps facilitate negotiations between the parties to reach a settlement. Mediation can be a cost-effective and efficient way to resolve disputes without the need for a full arbitration hearing.

Evidentiary Hearing

If mediation is unsuccessful, the case proceeds to the evidentiary hearing. During the hearing, both parties present their evidence, call witnesses, and make their arguments before the arbitrators. The hearing is less formal than a courtroom trial but follows a similar structure, with opening statements, witness examinations, and closing arguments.

Decision and Award

After the hearing, the arbitrators deliberate and make a decision, known as an award. The award may include monetary compensation, damages, and other remedies. FINRA awards are binding and enforceable in court, providing a final resolution to the dispute.

Client Success Stories

At Bakhtiari & Harrison, we take pride in our record of success that we have achieved for our clients. Here are a few testimonials and case studies that illustrate our dedication and value:

Testimonials

C. B.: Bakhtiari & Harrison played a crucial role in helping me recover my life savings after my financial advisor misled me into investing in unsuitable stocks. Their team displayed compassion, expertise, and an unwavering commitment to advocating for my rights. I am extremely grateful for the support they provided throughout the process.
M.S.: I am beyond grateful for the exceptional legal representation provided. Facing a challenging case involving intricate financial and investment laws, the firm demonstrated unparalleled integrity and legal acumen from the initial filing to the successful mediation and settlement. Throughout the process, they patiently guided me, explaining each strategic decision with clarity and insight.

Case Studies

Case Study 1: A California investor lost over $500,000 due to unauthorized trading by their stockbroker. Bakhtiari & Harrison securities lawyers, successfully represented the investor in arbitration, resulting in a full recovery of their losses and additional damages for emotional distress.
Case Study 2: Investors fell victim to a Ponzi scheme orchestrated by their financial advisor and brokerage firm. The skilled attorneys at Bakhtiari & Harrison took action by filing arbitration claims on behalf of these investors, successfully securing millions of dollars in settlements.

If you have lost money in the stock market due to the wrongdoing of your financial advisor or stockbroker, it is crucial to take action. At Bakhtiari & Harrison, we are here to fight for your rights and help you recover your losses. Our team of experienced securities attorneys is dedicated to providing compassionate and effective legal representation.

Don’t let unethical advisors and brokers get away with their misconduct. Reach out to Bakhtiari & Harrison for a free consultation and let us help you seek justice. Contact us today to discuss your case and learn more about your legal options.

Final Note

Taking action against unethical financial advisors and stockbrokers is essential to protect your financial future.

California securities attorneys at Bakhtiari & Harrison concentrate their practice on securities claims, which allows them to be intimately familiar with California securities laws as well as the Sarbanes-Oxley Act. This deep understanding of local and federal regulations ensures that they can effectively represent investors who have suffered financial losses due to misconduct.

The firm provides representation for investors throughout Southern, Central, and Northern California, including cities such as Anaheim, Beverly Hills, Los Angeles, Menlo Park, Mountain View, Orange County, Palm Springs, Sacramento, San Bernardino, San Diego, San Francisco, San Jose, Santa Ana, Santa Barbara, and Santa Monica, as well as Palos Verdes Estates.

Trust California securities attorneys at Bakhtiari & Harrison to fight for your rights and help you recover your losses. Empower yourself and take the first step toward justice today. Contact us.

10 Questions and Answers

What is a securities attorney?

A California securities attorney focuses in legal matters related to investments, stocks, and financial markets. They help clients resolve disputes with financial advisors or brokerage firms and recover losses due to misconduct.

How can a California securities attorney help investors?

California securities attorneys assist investors by investigating claims, filing legal actions, representing them in arbitration or court, and working to recover financial losses caused by fraud or negligence.

What is FINRA arbitration?

FINRA arbitration is a process where disputes between investors and financial advisors or brokerage firms are resolved by neutral arbitrators. It is an alternative to traditional courtroom litigation.

What is the role of an arbitrator in FINRA arbitration?

Arbitrators are neutral third parties who hear the evidence, review the arguments, and make a binding decision (award) in disputes between investors and financial advisors or brokerage firms.

How do I file a claim with FINRA?

To file a claim with FINRA, you need to submit a Statement of Claim that outlines the details of the dispute, the misconduct, and the damages being sought. An experienced securities attorney can assist with this process.

What is mediation in the context of FINRA arbitration?

Mediation is a voluntary process where a neutral mediator helps facilitate negotiations between the parties to reach a settlement. It is often used before the evidentiary hearing in FINRA arbitration.

What are some common types of financial advisor misconduct?

Common types of misconduct include recommending unsuitable investments, misrepresenting material facts, churning, unauthorized trading, front running, Ponzi schemes, and failure to conduct proper due diligence.

Can I recover my losses if my financial advisor engaged in unauthorized trading?

Yes, if your financial advisor engaged in unauthorized trading, you may be able to recover your losses through legal action or FINRA arbitration. A securities attorney can help you pursue your claim.

How long does the FINRA arbitration process take?

The length of the FINRA arbitration process can fluctuate, but it generally spans one year to 18 months from the claim submission to the final ruling. For senior citizens, FINRA offers an expedited hearing schedule. Additionally, mediation may help accelerate the resolution process.

Why should I choose California Securities Attorneys at Bakhtiari & Harrison for my case?

California securities attorneys at Bakhtiari & Harrison have a proven track record of successfully representing investors in securities cases. Their team of experienced attorneys is dedicated to fighting for your rights and helping you recover your losses.