Gathering Documents Relating to Your Investment Loss Claims
After your investment loss claims have been filed, your FINRA arbitration
case will proceed to what’s called the “discovery” process.
During this process, the lawyers gather the necessary documents and uncover
facts relevant to the various claims and defenses at issue in your case.
The parties in arbitration – both the investor and the brokerage
firm – engage in discovery so that they can be properly prepared
for the final arbitration hearing and avoid surprises that can adversely
affect the outcome of the case.
In FINRA arbitration, most discovery takes place in the form of documents
that the parties have in their possession relating to the claims and defenses
in the case. In an effort to try to streamline the discovery process and
cut down on the number of discovery-related disputes, FINRA has declared
that certain documents are presumptively discoverable in all customer
disputes. This includes a list of documents that brokerage firms are expected
to produce in customer disputes, as well as a separate list of documents
that investors are expected to produce.
For brokerage firms, these documents include new account forms signed by
the customer; documents relating the customer’s investment objectives
and risk tolerance; notes maintained by the brokerage firm about the customer;
compliance and supervisory reports relating to activity in the customer’s
account; any recordings, telephone logs, and notes of telephone calls
or conversations about the transactions at issue; and numerous other documents
relating to the customer’s investments and the brokerage firm’s
Likewise, customers in FINRA arbitration are expected to produce documents
including prior years’ tax returns, including both individual and
business returns; net worth statements; emails with the brokerage firm;
account statements from other, third-party brokerage firms; copies of
other complaints made by the investor involving other brokers or brokerage
firms; the customer’s resume; and various other documents as well.
While arbitrators do recognize exceptions to the discovery lists in certain
cases, we tell our clients to be prepared to gather all of the documents
identified by FINRA. In the video below, attorney Courtney Werning explains
what we do with your documents once we receive them.
It is critically important for investors to hire an experienced securities
arbitration attorney when pursuing claims in FINRA arbitration. If you
have questions about a potential case or the discovery process in particular,
please give us a call today.