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.

Manhattan Beach Investment Fraud Attorneys

Investing in the stock market is an excellent way to grow your wealth and achieve financial security. However, for residents of Manhattan Beach, Los Angeles County, the risks of investment fraud are an ever-present concern. This affluent coastal city’s investors often face unique challenges, such as navigating complex financial instruments and maintaining trust in stockbrokers or financial advisors. Unfortunately, these challenges can lead to devastating financial losses when fraudulent schemes or misconduct occur. Manhattan Beach investment fraud attorneys at Bakhtiari & Harrison represent investors in claims involving the securities industry.

In this blog post, we will define investment fraud, discuss its impact on Manhattan Beach investors, and explore how you can protect yourself. We’ll also highlight the importance of consulting an experienced investment fraud attorney and why Bakhtiari & Harrison should be your first call for legal assistance.

If you’ve suffered financial losses due to investment fraud, don’t wait. Contact Manhattan Beach investment fraud attorneys at Bakhtiari & Harrison today to start the process of recovering your money and protecting your future.

What is Investment Fraud?

Investment fraud refers to deceitful practices designed to mislead investors and steal their money. Common examples include Ponzi schemes, broker misconduct, unauthorized trading, and false promises of guaranteed returns. Victims often trust financial professionals or invest in seemingly legitimate opportunities, only to discover later that their money has been lost or misused.

In Manhattan Beach, where many residents have high-net-worth portfolios, the risks of investment fraud are amplified. Fraudsters often target this affluent community with complex schemes that appear tailored to their financial sophistication and goals. Manhattan Beach investment fraud attorneys at Bakhtiari & Harrison represent investors in claims involving the securities industry.

Common Types of Investment Fraud

Ponzi Schemes: These scams use funds from new investors to pay returns to earlier investors, creating the illusion of profitability until the scheme inevitably collapses.
Stockbroker Misconduct: This occurs when brokers engage in unauthorized trading, excessive transactions, or recommend unsuitable investments to boost their own commissions.
Affinity Fraud: Fraudsters exploit trust within tight-knit communities, such as social or professional groups, to promote fake investment opportunities.
Pump and Dump Schemes: Fraudsters artificially inflate a stock’s value through false statements and then sell their shares at a profit, leaving other investors with worthless securities.
High-Yield Investment Programs (HYIPs): These schemes promise extraordinarily high returns with little or no risk. They are often marketed to affluent individuals but rarely deliver on their promises, leaving victims with significant losses. Manhattan Beach investment fraud attorneys at Bakhtiari & Harrison represent investors in claims involving the securities industry.

Manhattan Beach investors face several distinct challenges:

Targeted by Sophisticated Scams: Affluent and financially educated individuals often receive offers for exclusive, high-yield investments that turn out to be fraudulent.
Trust in Advisors: Many investors rely heavily on stockbrokers or financial advisors. When these professionals act dishonestly, the resulting financial losses can be catastrophic.
Complex Financial Products: Investments in hedge funds, private equity, or other intricate financial instruments can obscure fraudulent activity and delay its detection.
Community Dynamics: Manhattan Beach is a tight-knit community where word-of-mouth referrals are common. Unfortunately, this can sometimes lead to affinity fraud, where trust within the community is exploited for personal gain. Manhattan Beach investment fraud attorneys at Bakhtiari & Harrison represent investors in claims involving the securities industry.

By staying informed and vigilant, investors in Manhattan Beach can reduce their exposure to these risks. However, recognizing signs of fraud and taking immediate action is essential.

Real Examples of Investment Fraud in Manhattan Beach

Ponzi Scheme Losses: A Manhattan Beach retiree trusted a long-time acquaintance who promised guaranteed returns but lost their life savings to a Ponzi scheme.
Unauthorized Trades: A local entrepreneur discovered their stockbroker had made high-risk, unauthorized trades, resulting in significant portfolio losses.
Cryptocurrency Fraud: A young professional was duped into investing in a fraudulent cryptocurrency scheme, leading to substantial financial setbacks.
Real Estate Investment Scams: Scammers promised lucrative returns from real estate projects but diverted funds for personal use, leaving investors with no recourse. Manhattan Beach investment fraud attorneys at Bakhtiari & Harrison represent investors in claims involving the securities industry.
Phantom Companies: Investors were misled into funding non-existent businesses, only to realize their capital had vanished without a trace.

These cases demonstrate the importance of consulting an experienced investment fraud attorney to recover losses and hold perpetrators accountable.

How to Recognize Investment Fraud

Unrealistic Promises: Be skeptical of investments that guarantee high returns with minimal or no risk.
Pressure Tactics: Fraudsters often use high-pressure sales tactics, insisting you must “act now” or lose out.
Lack of Transparency: If the investment’s details, risks, or returns are not clearly explained, proceed with caution.
Unlicensed Brokers: Always verify the credentials of brokers or advisors with regulatory organizations like FINRA. Manhattan Beach investment fraud attorneys at Bakhtiari & Harrison represent investors in claims involving the securities industry.
Missing Documentation: Legitimate investments always include comprehensive documentation and disclosures.

Tips to Protect Yourself Against Investment Fraud

Conduct Due Diligence: Verify the legitimacy of any investment opportunity and the credentials of those offering it.
Be Wary of Unrealistic Promises: High returns with little or no risk often signal fraudulent activity.
Monitor Your Accounts: Regularly review statements for unauthorized or suspicious activity.
Understand the Risks: Fully comprehend the risks associated with any investment before committing your funds.
Educate Yourself: Familiarize yourself with common types of fraud and scams to spot red flags early. Manhattan Beach investment fraud attorneys at Bakhtiari & Harrison represent investors.
Consult Professionals: If you suspect fraud, an investment fraud attorney can provide guidance and take action to recover your losses.

Why Choose Manhattan Beach Investment Fraud Attorneys at Bakhtiari & Harrison?

Ryan Bakhtiari and David Harrison are nationally recognized investment fraud attorneys dedicated to helping clients recover their financial losses. Their extensive experience includes handling cases involving FINRA arbitration, broker misconduct, and fraudulent investment schemes. Manhattan Beach investment fraud attorneys at Bakhtiari & Harrison represent investors.

Ryan Bakhtiari

Ryan Bakhtiari is a leading advocate for investors’ rights. His work in identifying fraudulent practices and navigating complex legal frameworks ensures his clients receive top-tier representation. With a proven track record in securing favorable outcomes, Ryan is a trusted partner for Manhattan Beach investors.

David Harrison

David Harrison’s decades-long career as a securities attorney has earned him a reputation for excellence. He brings a meticulous approach to every case, offering personalized strategies that address the unique needs of his clients. David’s dedication to protecting investors has made him a pillar of the legal community.

Comprehensive Legal Support

Bakhtiari & Harrison provide comprehensive legal support, including:

Filing claims and lawsuits against fraudulent entities.
Representing clients in FINRA arbitration. Manhattan Beach investment fraud attorneys at Bakhtiari & Harrison represent investors.
Recovering lost funds through negotiations or court proceedings.
Offering guidance on preventing future fraud.

If you’re a Manhattan Beach investor who has experienced financial losses due to investment fraud, don’t hesitate to seek legal help. Bakhtiari & Harrison are here to provide the guidance you need to reclaim your financial security and hold fraudsters accountable. Contact them today for a consultation and take the first step toward justice.

If you’ve been the victim of investment fraud, contact the California investment fraud lawyers at Bakhtiari & Harrison for a free initial consultation. Manhattan Beach investment fraud attorneys at Bakhtiari & Harrison represent victims of financial and investment disputes throughout California, including Bel Air, Beverly Hills, Brentwood, Culver City, Encino, Hancock Park, Hidden Hills, Hollywood Hills, Los Angeles, Malibu, Orange County, Pacific Palisades, Palm Springs, Pasadena, San Diego, San Francisco, Santa Barbara, Santa Monica, Studio City, Toluca Lake, Ventura County and other locations. Our Manhattan Beach investment fraud attorneys will work tirelessly in pursuit of financial compensation for your investment losses.