What to Expect from FINRA Dispute Resolution

FINRA dispute resolution resolves disputes between customers and stockholders or Wall Street involved in fraudulent or negligent broker activity

If you’re an investor and have a dispute with a securities firm or broker that can’t be settled through a mutual agreement or outside settlement, the case may be arbitrated or mediated in FINRA’s dispute resolution forum.

Will FINRA hear my case?

FINRA hears securities arbitration claims between customers and FINRA registered brokerage firms and stockbrokers.

Securities Arbitration

An arbitrator, much like a judge or panel of judges, is an unbiased third party that looks at the evidence, hears the arguments, and makes a decision. This decision, called an award, is binding, just like a judge’s decision would be in a court of law.

Arbitration is generally considered faster and less expensive than pursuing the claims in court. Also, generally, a FINRA arbitration is binding with limited basis of appeal. Most arbitration claims are resolved in nine to eighteen months.

Securities mediation

In mediation, an impartial mediator helps both sides come to a mutual agreement about how to settle the financial dispute. It’s important to understand that mediation is completely voluntary; both parties must agree to the meditation and either can choose to reject any settlement proposals.

Both mediation and arbitration have been shown to significantly reduce legal and administrative costs for both parties, as well as greatly reduce the time involved. FINRA notes that more than 80 percent of mediations result in a settlement. Solutions are not imposed in mediation as they are in arbitration and a settlement is not binding until both parties agree to sign a settlement agreement.

What is FINRA’s Role in the Dispute Resolution Process?

FINRA does not actually decide the cases. It purports to be a neutral forum and cannot offer legal services or advice to investors, brokers, or other parties. Depending upon the amount of money in question, either FINRA, or the parties in question, (or both) will choose a mediator or an arbitrator or arbitrators to decide the case.

How Do I Get Started?

To initiate arbitration, you or your securities arbitration attorney must file a statement of claim and supporting documents with FINRA. A statement of claim includes a description of the dispute, the amount of money sought, and the parties involved in the case. To initiate mediation, one or both parties must request mediation. Parties involved in arbitration can request mediation at any time before the arbitrators issue an award.

Seek legal council before filing a statement of claim

If you’re considering requesting mediation or arbitration hearing using FINRA’s dispute resolution process, it’s important to be prepared, understand the process, and know your rights. This means making sure your case is eligible to be decided by a FINRA dispute resolution hearing, acquiring representation, gathering all the correct documentation for your case, deciding on an arbitrator or mediator, and understanding the many details and regulations that govern the FINRA dispute resolution process.

If you have any questions about the FINRA dispute resolution process, think you have been defrauded by a broker, financial advisor, or financial institution, or want to know your rights as an investor, contact Silver Law Group for a consultation today. Our attorneys have recovered over $100 million dollars for wronged investors and have handled over 1,000 FINRA arbitration claims.