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.

Pacific Heights Investment Fraud Lawyer

Pacific Heights in San Francisco offers a distinct landscape for its residents, especially those of higher income, who might be more vulnerable to misconduct by stockbrokers or financial advisors. This affluent neighborhood, known for its elevated property values, reflects its residents’ wealth.

This affluence can attract unscrupulous financial advisors or stockbrokers who seek to exploit wealthy clients, making them potential victims of securities fraud, especially if they are less vigilant or knowledgeable about their investment decisions. Pacific Heights investment fraud lawyers at Bakhtiari & Harrison represent investors harmed by securities fraud and other investment mismanagement problems.

Residents of Pacific Heights may find themselves particularly vulnerable to certain types of investment fraud or misconduct, such as being directed toward inappropriate investments or ending up with inadequately diversified portfolios after cashing in stock options or witnessing a startup’s public offering.

This susceptibility can be amplified by the lifestyle and prestige associated with the neighborhood, where reliance on purported financial experts tends to be more common. High-net-worth individuals, often targeted for complex and high-risk investment opportunities, can inadvertently get caught in schemes that promise impressive returns but entail considerable risks, sometimes without their full understanding or approval.

Moreover, the ongoing development and high property values in Pacific Heights might make real estate investment trusts (REITs) and other property-related investments particularly appealing. However, this attractiveness can also lead to misconduct, especially when advisors make false statements or do not fully disclose the associated risks. Inadequate advice, tailored to individual financial situations, can further exacerbate these issues, leaving unsuspecting investors vulnerable to significant financial loss.

Table of Contents

Understanding Investment Fraud

Investment fraud is a serious issue in Pacific Heights, San Francisco, and beyond. Victims often face significant financial losses due to deceptive practices by stockbrokers or financial advisors. Knowing what constitutes investment fraud can help protect your investments and hold perpetrators accountable.

Definition of Securities Fraud

Securities fraud occurs when a stockbroker, financial advisor, or brokerage firm engages in wrongdoing with a customer’s account. They might provide unsuitable recommendations or make unauthorized trades. Misrepresentations to induce a purchase and a failure to diversify customer portfolios also fall under this category. These actions often lead to a loss of trust and can result in legal action.

Types of Securities Fraud Schemes

Various schemes can lead to securities fraud. One common scheme is recommending a security without proper due diligence in the sale of securities. Sometimes, brokerage firms are motivated by commissions rather than the best interests of the investor. In such cases, a firm might place the security above risk management practices. Failure to inform a stockbroker about all the risks involved can also lead to these fraudulent schemes.

Common Characteristics of Fraudulent Investments

Investors should be on the lookout for certain red flags. Fraudulent investments often promise high returns that seem too good to be true. A stockbroker’s explanation that sounds fishy or confusing can be a warning sign. If a broker “guarantees” investment performance, it’s a red flag too. Pacific Heights investment fraud lawyers at Bakhtiari & Harrison represent investors harmed by securities fraud and other investment mismanagement problems. These characteristics often point to potential investment fraud and should be investigated further.

By being informed and vigilant, investors can protect themselves against the devastating impacts of investment fraud and misguided recommendations. Seeking legal representation from experienced investment fraud lawyers can also ensure that victims of fraud get the justice they deserve.

Legal Consequences of Investment Fraud

Investment fraud can have severe legal consequences for those involved. Many disputes are resolved through FINRA arbitration. This process starts with filing a statement of claim. The party accused will then answer the claim. Next is document discovery, but unlike court cases, depositions are not included. Then, there is an evidentiary hearing where both sides present their cases. Finally, an award is given, which decides the outcome. This method often helps bring resolution more swiftly than going through the courts.

FINRA BrokerCheck

FINRA BrokerCheck is a tool that provides information about brokers and brokerage firms. You can access it here. It allows you to see if a firm or broker has faced any allegations of fraud or wrongdoing including a conviction for securities fraud. When there are such claims, firms must file a disclosure. This helps potential investors make informed decisions. BrokerCheck is essential for evaluating the trustworthiness of financial professionals.

Impact on Victims and Their Financial Health

The impact of investment fraud on victims can be devastating. Many lose substantial amounts of money and feel deeply betrayed. This is particularly harsh for retirees on fixed incomes who cannot easily replace lost capital. Their financial health and future depend heavily on these investments. The emotional toll can be severe, leading to stress and uncertainty about their financial future.

Filing a Claim with FINRA

Some investors mistakenly believe that FINRA Enforcement will recover their lost funds from fraud. However, FINRA’s role is to investigate misconduct and determine if a violation occurred. These actions can result in fines or suspensions but not direct recovery of funds. For recovering lost money, engaging an investment fraud attorney is crucial. These attorneys advocate for investors, aiming to retrieve as much of the lost funds as possible. An attorney can file a claim and work toward a resolution that benefits the investor.

Understanding these legal frameworks and seeking proper legal representation can guide victims towards regaining their financial stability. Pacific Heights investment fraud lawyers at Bakhtiari & Harrison represent investors harmed by securities fraud and other investment mismanagement problems.

Pacific Heights Investment Fraud Lawyers

When faced with investment fraud, getting the right legal help is crucial. Experienced investment fraud lawyers offer a wealth of knowledge. They grasp stock market dynamics and basic investment principles. A good lawyer will understand securities, risk, return, and more.

Benefits of Legal Assistance:

Investment Knowledge: Lawyers knowledgeable in investments can spot misleading statements and misrepresentations.
FINRA Arbitration Experience: Skilled in FINRA arbitration, they are best suited to handle disputes with brokerage firms.
Risk Management: They help in assessing risk and return, ensuring investment portfolios align with risk tolerance.
Decades of Experience: Pacific Heights investment fraud lawyers with years of practice know the signs of securities fraud. They can identify types of investment misconduct, from excessive trading to unsuitability.
Exit Strategy Development: They assist in planning a sound exit strategy, limiting financial losses.

Hiring an attorney for investment fraud is not just about legal help—it’s about safeguarding your financial future. Whether it’s wire fraud or insider trading, having legal representation ensures perpetrators of securities fraud are held accountable.

Bakhtiari & Harrison – Experienced Securities Fraud Lawyers

Pacific Heightes investment fraud lawyers at Bakhtiari & Harrison are a trusted law firm concentrating on investment fraud located in California. Our team is dedicated to helping victims navigate complex fraud cases. With over 50 years of combined experience, our attorneys, Ryan Bakhtiari and David Harrison, use their in-depth legal knowledge to provide top-tier legal representation.

Importance of Experienced Counsel:

Superior Knowledge in Investment Fraud: Focus on securities and investment fraud cases.
Strategic Approach: Customized strategies for each client based on specific needs.
Successful Track Record: Proven history of securing favorable outcomes.

Our legal team understands the devastating impact of fraudulent investment schemes. We effectively handle issues such as:

Churning
Misleading Statements
Unsuitability
Failure to Diversify

Contact us if you’re a victim of investment fraud. We are committed to pursuing justice and recovering your financial losses. Let our experienced team guide you through the legal maze with confidence and care.

If you’ve been the victim of investment fraud, contact the Pacific Heights investment fraud lawyers of Bakhtiari & Harrison for a free initial consultation. We represent victims of financial and investment fraud throughout California, including Alameda, Alamo, Albany, Atherton, Belmont, Berkeley, Burlingame, Corte Madera, Cupertino, Foster City, Hillsborough, Lafayette, Larkspur, Los Altos, Los Altos Hills, Los Gatos, Menlo Park, Moraga, Mountain View, Oakland, Orinda, Pacific Heights, Palo Alto, Piedmont, Pleasanton, San Anselmo, San Carlos, San Francisco, San Ramon, Santa Clara, Santa Rosa, Saratoga, Sunnyvale, Walnut Creek, and other locations. Pacific Heights investment fraud lawyers working tirelessly in pursuit of financial compensation for your investment losses.