AAA Arbitration

Arbitration is often the best action to take to resolve a dispute instead of a lawsuit. However, it is important that the right type of arbitration is used. When a dispute concerns brokers, going through the Financial Industry Regulatory Authority (FINRA) is typically the most effective tactic – and a required one if arbitration is the chosen course of action. However, when an investment advisor is involved who is not registered with FINRA, the claim is frequently handled by the American Arbitration Association (AAA).

Founded in 1996, the AAA is a nonprofit agency that is the largest arbitration group in the U.S. Its aim is to resolve disputes in a fair and impartial manner. The services of the AAA include:

• Helping with the appointment of mediators and arbitrators
• Setting hearings
• Offering all parties information on the options regarding dispute resolution

When a case has to go to court, it can be extremely costly for everyone involved. Arbitration is not only less expensive; it is usually a much faster process. The AAA states that their goal is to “move cases from filing to award as quickly and cost-effectively as possible, while ensuring that all parties are treated fairly and equitably.”

The AAA has many practice areas, and one of them is the commercial sector that handles issues related to financial services. Common arbitration cases involve registered investment advisors (RIAs). Unlike brokers or other financial professionals, RIAs are not registered with FINRA. They are regulated by the SEC along with state authorities.

As the number of RIAs has grown over the last decade, they frequently include an AAA arbitration clause in their customer agreements, as opposed to a FINRA arbitration clause. This means that any dispute has to go through AAA, which has its own specific costs, procedures, and jargon.

Although a lawyer isn’t required for arbitration, there is a lot of legal language and procedural aspects that can be difficult to navigate. This is why having an experienced attorney by your side can make things much easier while increasing the chances of a successful outcome.

The Silver Law Group has represented numerous investors throughout the AAA arbitration process. We’re very familiar with AAA and its many rules and procedures. To learn how we may be able to help you, contact us at 800-975-4345 or through our online form.