The FINRA Arbitrator Selection Process
Most brokerage firms make their customers sign paperwork that requires
the mandatory arbitration of any customer dispute. This means that if
you have a legal claim against your brokerage firm, you typically cannot
bring your case in court to be decided by a judge or a jury. Instead,
you must bring your claim in arbitration through the Financial Industry
Regulatory Authority, or FINRA, where most customer cases are decided.
How those arbitrators are selected is a critical process that may determine
whether your case is won or lost. Our law firm dedicates significant time
and resources to this crucially important part of your case.
FINRA maintains a computer database of thousands of arbitrators who have
been trained and approved by FINRA to serve as arbitrators in customer
disputes. After your case is filed, FINRA generates a random list of arbitrators
from its roster and sends the list to the attorneys for both the customer
and the brokerage firm. Under FINRA’s rules, counsel for the parties
are then permitted to strike a certain number of arbitrators from the
list and rank the remaining arbitrators in order of preference. The parties
then submit their ranked choices to FINRA confidentially – neither
side knows who the other side struck or how they ranked the arbitrators.
FINRA combines the parties’ ranked lists and seeks to appoint the
highest ranked available arbitrator from each list to serve on the panel.
For cases involving damages over $100,000, three arbitrators are selected.
Smaller cases are decided by a single arbitrator.
Our law firm maintains and updates files on numerous FINRA arbitrators
throughout the country. We know where they went to school, how they earn
a living, and how long they’ve been arbitrators. We keep records
of every arbitration decision they’ve ever made, and we keep a running
tab of their award history both in terms of actual dollars awarded and
as a percentage of the dollar amount sought in each case. Importantly,
we do not rely on just the information disclosed by the arbitrators themselves.
We dig deeper, gleaning information from the internet and social media
that give us insights into the arbitrators’ personal proclivities
and biases. We rely on insights from colleagues, and we also draw upon
our own personal experience with many arbitrators. In nearly 20 years,
our law firm has represented approximately 1,000 investors with claims
against their financial advisors. We have experience with many of these
arbitrators and know from personal experience which ones are more likely
to run a fair hearing and give you fair opportunity at proving your case.
If you have questions about the FINRA arbitrator selection process, please
give one of our experienced securities arbitration lawyers a call at one
of our offices, or
fill out our online form to tell us more about your case.