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.

Janney Montgomery Scott Investment Lawyer

Janney Montgomery Scott LLC, headquartered in Philadelphia, Pennsylvania, is a full-service broker-dealer and registered investment adviser providing investment, wealth management, and capital markets services. The firm serves individual investors, businesses, and institutions through its network of financial advisors. This overview reviews Janney’s history, regulatory background, and key operational metrics, with a focus on compliance practices and client relations.

History of Janney Montgomery Scott

Founded in 1832, Janney Montgomery Scott is one of the oldest financial services firms in the United States. Janney has built its reputation on providing personalized investment advice and wealth management solutions. The firm operates as a subsidiary of The Penn Mutual Life Insurance Company, giving it the backing of a major financial institution while maintaining a client-focused approach.

Key Business Metrics

CRD Number

Janney Montgomery Scott is registered under CRD number 463. Regulatory authorities use this identifier to track the firm’s registration history, disclosure records, and any disciplinary actions.

Number of Regulatory Events

Janney has been subject to several regulatory actions over its long history. These events often involve supervisory issues, compliance failures, and customer complaint resolutions. The firm has responded to these regulatory matters through settlements and improvements to its compliance systems.

Number of Employees

Janney employs thousands of professionals, including financial advisors, investment bankers, research analysts, and operational staff. The firm’s strong advisor network spans across the East Coast and beyond, offering localized service with national resources.

Assets Under Management (AUM)

Janney Montgomery Scott manages tens of billions of dollars in client assets across advisory, brokerage, and retirement accounts, reflecting its significant role in the regional wealth management and investment banking sectors.

Revenue

The firm generates substantial annual revenue through wealth management fees, brokerage commissions, investment banking services, and advisory account charges.

Regulatory and Compliance Landscape

Janney is regulated by FINRA and the SEC. While the firm has robust compliance frameworks in place, regulatory inquiries over the years highlight the challenges of maintaining consistent oversight across a large and geographically dispersed advisor base.

Notable Regulatory Issues

Janney’s regulatory history includes:

Supervisory Deficiencies: Regulatory findings have cited Janney for lapses in monitoring advisor activities and the sale of complex investment products.
Disclosure Failures: Some regulatory actions have involved failure to properly disclose certain costs, risks, and conflicts of interest to clients.
Fines and Settlements: Janney has resolved regulatory matters through fines and agreed-upon enhancements to its compliance and supervisory practices.

These cases emphasize the ongoing need for rigorous training, advisor oversight, and client transparency.

Customer Complaints

Customer complaints involving Janney Montgomery Scott have included:

Unsuitable Recommendations: Allegations that advisors recommended investments inconsistent with client goals and risk profiles.
Complex Product Sales: Disputes regarding the sale of non-traditional or high-risk investment products without adequate explanation of risks.

Many of these complaints have been handled through FINRA arbitration and internal resolution efforts.

Advisor Support and Client Services

Janney provides advisors with access to a full suite of financial planning tools, research services, investment products, and compliance resources. The firm supports both traditional commission-based brokerage business and fee-based advisory models.

Clients benefit from personalized financial planning, investment management, retirement strategies, and access to market research. Janney emphasizes a client-first approach, although outcomes can vary depending on the individual advisor relationship.

Customer Experience and Reputation

Janney Montgomery Scott is widely regarded for its client service, regional presence, and stability. The firm’s personalized approach and deep advisor relationships have fostered strong loyalty, though its regulatory history serves as a reminder of the importance of consistent compliance and client communication.

Looking Ahead

As the financial services landscape evolves, Janney continues to invest in technology, advisor support, and regulatory compliance. Enhancing transparency, expanding service offerings, and maintaining high ethical standards will be critical for sustaining its strong client relationships and market presence.

Final Thoughts

Janney Montgomery Scott LLC is a respected name in the investment advisory and brokerage industry, offering a blend of personalized service and institutional support. However, like any financial firm, its regulatory record highlights the importance of ongoing vigilance by both clients and advisors. For more information, contact Bakhtiari & Harrison.