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.

Royal Alliance Associates, Inc. Investment Lawyer

Royal Alliance Associates, Inc. is a prominent independent broker-dealer and registered investment adviser (RIA) operating in the United States. As part of the Advisor Group, one of the nation’s largest networks of independent financial professionals, Royal Alliance has earned recognition for its comprehensive support to financial advisors. This blog explores the history of the firm, its regulatory profile, and key business metrics to provide a thorough understanding of its operations.

History of Royal Alliance Associates, Inc.

Founded in 1969, Royal Alliance Associates, Inc. has a long-standing history of empowering independent financial advisors. The firm became part of Advisor Group in 1989, benefiting from the scale and resources of one of the largest independent financial services networks in the country. The firm’s focus has always been on delivering flexible solutions and robust support, enabling advisors to provide customized financial guidance to their clients.

Key Business Metrics

CRD Number

Royal Alliance Associates, Inc. is registered under CRD number 23131. This number is used by regulatory bodies to track the firm’s registration status and compliance history.

Number of Regulatory Events

According to BrokerCheck and the firm’s CRD record, Royal Alliance has been involved in approximately 25 regulatory events. These events primarily involve compliance and supervisory issues, which are not uncommon for large broker-dealer firms. Royal Alliance has demonstrated a commitment to addressing these matters proactively and enhancing its compliance protocols.

Number of Employees

The firm employs approximately 500 professionals dedicated to supporting its network of financial advisors. These employees provide critical services, including compliance oversight, technology support, and operational assistance, ensuring that advisors have the resources they need to succeed.

Assets Under Management (AUM)

Royal Alliance manages approximately $100 billion in assets under management (AUM) as of 2023. This significant figure underscores the firm’s ability to attract and retain experienced financial advisors and their clients.

Revenue

The firm generates approximately $1 billion in annual revenue, reflecting its robust service offerings and the scale of its operations. The firm’s diversified revenue streams include brokerage services, advisory platforms, and other financial solutions tailored to independent advisors and their clients.

Regulatory and Compliance Landscape

As a regulated broker-dealer and RIA, Royal Alliance operates under the oversight of the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC). The firm’s strong compliance culture is designed to address risks and ensure adherence to regulatory standards.

Notable Regulatory Issues

Royal Alliance has faced regulatory actions related to supervisory and compliance matters, including issues involving mutual fund recommendations and sales practices. These actions highlight the complexities of regulatory compliance in the financial industry. The firm has taken steps to enhance its supervisory framework and implement best practices to mitigate future risks.

Customer Complaints

Customer complaints against Royal Alliance Associates are addressed through established resolution processes, including arbitration and mediation when necessary. While complaints are a common occurrence in the financial services sector, Royal Alliance’s commitment to transparency and accountability helps maintain trust among advisors and clients.

Commitment to Advisor Support

The firm is renowned for its advisor-centric approach, providing a wide array of resources to help financial advisors grow and manage their practices effectively. The firm offers advanced technology platforms, including client management tools, portfolio analysis software, and integrated compliance solutions.

In addition to technology, Royal Alliance provides marketing support, educational programs, and practice management resources. These services enable advisors to deliver high-quality financial advice while focusing on their clients’ unique needs.

Customer Experience and Reputation

Royal Alliance has built a strong reputation among financial advisors and their clients. The firm is frequently praised for its comprehensive support, technological innovation, and advisor-focused culture. Clients benefit from the high standards upheld by Royal Alliance’s network of independent advisors, who prioritize personalized financial planning and investment strategies.

Looking Ahead

Royal Alliance Associates, Inc. continues to evolve to meet the changing demands of the financial services industry. The firm’s focus on integrating cutting-edge technology and expanding its service offerings positions it well for future growth. Additionally, Royal Alliance’s emphasis on compliance and advisor support ensures that it remains a trusted partner for financial professionals and their clients.

Final Thoughts

Royal Alliance Associates, Inc. stands out as a leading independent broker-dealer and RIA, offering a robust platform for financial advisors to thrive. With its strong regulatory framework, significant assets under management, and advisor-centric approach, the firm provides a compelling option for advisors seeking to grow their practices.

Whether you are a financial advisor exploring partnership opportunities or an investor seeking professional guidance, the firm offers the resources and expertise to help you achieve your financial goals. For more information, explore the firm’s services and discover how they align with your needs contact Bakhtiari & Harrison.