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.

Signator Investors Investment Lawyers

Signator Investors, Inc., formerly based in Boston, Massachusetts, was a full-service broker-dealer and registered investment adviser. The firm supported a network of independent financial professionals who provided investment, insurance, and financial planning services to retail clients across the United States. This overview examines Signator’s business model, regulatory history, and key operational metrics, with a focus on compliance and investor protection.

History of Signator Investors

Signator Investors was originally part of John Hancock Financial Network and operated as its broker-dealer and RIA arm. The firm offered a wide range of investment products, insurance services, and retirement planning tools through affiliated advisors. In 2018, Signator was acquired by Advisor Group and merged into Royal Alliance Associates, effectively ending its operations as a standalone entity. Prior to the acquisition, the firm emphasized long-term financial planning and advisor independence.

Key Business Metrics

CRD Number

Signator Investors was registered under CRD number 46888. Regulatory bodies used this number to track the firm’s licensing status, disclosure filings, and enforcement actions.

Number of Regulatory Events

Signator was involved in numerous regulatory events over the years, primarily related to inadequate supervision, unsuitable product sales, and disclosure failures. These matters led to FINRA and SEC actions and were resolved through fines and procedural changes.

Number of Employees

Before its integration into Royal Alliance, Signator supported hundreds of affiliated financial professionals, along with internal staff in compliance, operations, and business development roles.

Assets Under Management (AUM)

The firm managed billions in client assets across brokerage and advisory accounts, with a strong presence in retirement planning and insurance-related investment products.

Revenue

Signator generated revenue through commissions, advisory fees, insurance product sales, and revenue-sharing arrangements with product sponsors.

Regulatory and Compliance Landscape

Signator operated under the supervision of FINRA and the SEC. While the firm invested in compliance systems, its decentralized structure and emphasis on advisor autonomy created oversight challenges that contributed to regulatory violations.

Notable Regulatory Issues

Regulatory findings involving Signator included:

Supervisory Deficiencies: The firm was cited for failing to adequately supervise its financial professionals, particularly in the sale of annuities and alternative investments.
Disclosure Failures: Signator faced scrutiny for insufficient disclosure of fees, conflicts of interest, and product risks.
Fines and Settlements: The firm paid regulatory fines to settle violations related to sales practices, recordkeeping failures, and customer complaint handling.

These matters highlight the importance of effective compliance oversight, especially in firms with large independent advisor networks.

Customer Complaints

Common customer complaints against Signator involved:

Unsuitable Recommendations: Allegations that advisors placed clients in high-commission or illiquid products not aligned with their investment goals.
Annuity and Insurance Product Sales: Disputes involving variable annuities, indexed annuities, and other insurance-based investments were frequent, particularly regarding cost and liquidity.

Many disputes were resolved through arbitration and internal mediation processes.

Advisor Support and Client Services

Signator provided its affiliated advisors with access to a suite of investment products, insurance offerings, financial planning tools, and back-office support. While the firm encouraged advisor independence, the decentralized model required strong systems to ensure compliance and client protection.

Clients were offered a mix of advisory and brokerage services, along with insurance-based investment solutions. Service levels and practices varied based on the experience and integrity of individual advisors.

Customer Experience and Reputation

Signator was known for its deep roots in the insurance and financial planning industries, with many of its advisors having long-standing client relationships. However, its regulatory history revealed recurring issues tied to supervision and transparency. These challenges, along with broader industry consolidation trends, contributed to the firm’s integration into Royal Alliance.

Looking Ahead

Signator Investors no longer operates as an independent broker-dealer. Its former clients and advisors were absorbed into Royal Alliance and Advisor Group, now rebranded under Osaic. The Signator story underscores the need for strong supervisory systems, transparent disclosures, and client-first practices in the financial services industry.

Final Thoughts

Signator Investors, Inc. played a notable role in the independent advisory and insurance space but ultimately faced the same compliance and supervision challenges seen across many mid-sized broker-dealers. For more information, contact Bakhtiari & Harrison.