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.

Inspired Healthcare Capital Fund Investor Losses Investigated by Bakhtiari & Harrison

Bakhtiari & Harrison is actively investigating claims on behalf of investors who suffered losses in Inspired Healthcare Capital Fund and other related private placement offerings. Inspired Healthcare Capital, an Arizona-based investment sponsor focused on senior housing and healthcare real estate, suspended all investment offerings and halted investor distributions in July 2025 amid an ongoing regulatory review by the U.S. Securities and Exchange Commission (SEC). The firm also shut down its affiliated management entity, Volante Senior Living, after the CEO resigned. Operations have since transitioned to a third-party operator.

Reports indicate that only 10–15 of the fund’s 35 senior living properties are performing well, raising significant concerns about the financial condition of the fund and the potential impact on investors.

What is Inspired Healthcare Capital Fund?

Inspired Healthcare Capital Fund is a high-risk private placement offering that filed a Form D with the SEC in 2020 seeking to raise $30 million from investors. Like many Regulation D (“Reg D”) offerings under Rule 506(b), the fund is characterized by illiquidity, minimal disclosure, and a lack of investor protections compared to publicly traded securities. These types of investments are typically sold to accredited investors, but have at times been recommended to retail investors without sufficient risk disclosures.

Risks of Investing in Private Placement Offerings

Investments in private placement funds such as Inspired Healthcare Capital often carry elevated risk due to:

Long lock-up periods and lack of secondary market liquidity
High sales commissions that may incentivize unsuitable recommendations
Limited transparency and regulatory oversight
Potential conflicts of interest between issuers and brokers

Firms and advisors who recommend these investments are legally obligated to conduct reasonable due diligence and ensure that such products are suitable based on the investor’s risk tolerance, investment objectives, and overall financial profile.

Bakhtiari & Harrison is also reviewing investor losses related to other Inspired Healthcare Capital products, including:

Inspired Healthcare Capital Income Fund, LLC
Inspired Healthcare Capital Liquidity Fund, LLC
Inspired Healthcare Capital Security Income Fund, LLC
Inspired Senior Living of Appleton DST
Inspired Senior Living of Arlington Heights DST
Inspired Senior Living of Athens DST
Inspired Senior Living of Augusta DST
Inspired Senior Living of Beaverton DST
Inspired Senior Living of Brookhaven DST
Inspired Senior Living of Candlelight Cove DST
Inspired Senior Living of Carson Valley DST
Inspired Senior Living of Chesterfield DST
Inspired Senior Living of Cinnaminson DST
Inspired Senior Living of Creswell Development, LLC
Inspired Senior Living of Dartmouth DST
Inspired Senior Living of Delray Beach DST
Inspired Senior Living of Dunedin DST
Inspired Senior Living of Eatonton DST
Inspired Senior Living of Eugene DST
Inspired Senior Living of Fort Myers DST
Inspired Senior Living of Grapevine DST
Inspired Senior Living of Hamilton DST
Inspired Senior Living of Lake Orion DST
Inspired Senior Living of Largo DST
Inspired Senior Living of Las Vegas DST
Inspired Senior Living of Melbourne DST
Inspired Senior Living of Mequon DST
Inspired Senior Living of Naperville DST
Inspired Senior Living of New Braunfels DST
Inspired Senior Living of North Haven DST
Inspired Senior Living of Pinellas Park DST
Inspired Senior Living of Reno DST
Inspired Senior Living of Round Rock DST
Inspired Senior Living of San Marcos DST
Inspired Senior Living of St. Petersburg DST
Inspired Senior Living of Winery Lane Development, LLC

These affiliated investments may also share similar risk characteristics and suitability concerns.

Common Red Flags for Investors

Inspired Healthcare Capital Fund

If you experienced any of the following warning signs related to your Inspired Healthcare Capital investment, you may have a claim:

Substantial and unexplained losses in your account
Failure to receive distributions as promised
Lack of response from your financial advisor
Unauthorized or misrepresented transactions
Overconcentration of your portfolio in a single product or sector
Statements that contain discrepancies or appear fraudulent

Many investors trust their advisors after years of relationship-building. However, this trust does not excuse improper conduct or relieve advisors of their legal obligations. Brokerage firms may be liable for investor losses if they failed to supervise their advisors or permitted the sale of unsuitable investments.

Can You Recover Losses?

Yes. Investors who were harmed by unsuitable investment recommendations or brokerage misconduct related to Inspired Healthcare Capital may seek to recover their losses through FINRA arbitration. Unlike traditional lawsuits, FINRA arbitration is a streamlined legal process specifically designed to resolve disputes between investors and their financial professionals.

At arbitration, a panel of independent arbitrators hears the facts and can award financial compensation to investors if wrongdoing is found.

Filing a FINRA Arbitration Claim

Bakhtiari & Harrison represents investors nationwide in pursuing recovery through FINRA arbitration. Our attorneys have extensive experience litigating complex securities matters, including private placements and Reg D offerings.

If you were sold an investment in Inspired Healthcare Capital Fund or a related offering, and have suffered financial harm, you may be entitled to compensation.

Contact Bakhtiari & Harrison Today

If you believe you were misled or unsuitably advised to invest in the Inspired Healthcare Capital Fund or any other private placement, contact Bakhtiari & Harrison for a free, confidential consultation. Our firm will review your case, evaluate your legal options, and guide you through the process of pursuing financial recovery.

Call us today or complete our online contact form to speak with an experienced investment fraud attorney.