FINRA Securities Arbitration: Why It’s Mandatory & What’s Involved

When you opened your account at the brokerage firm, you may not have paid a lot of attention to the mandatory arbitration provision in your paperwork. Most investors don’t anticipate that they will end up pursuing a claim against their broker for fraud or some other form of misconduct.

If you are considering filing a broker fraud claim, you need to understand the components involved in securities arbitration before the Financial Industry Regulatory Authority (FINRA).

Arbitration Panel
FINRA arbitration occurs in lieu of going to court, meaning a judge will not be hearing your case. Instead, there are one or three arbitrators that make up the “panel,” which is charged with reviewing the claim and listening to arguments made by both parties. The panel will study the available evidence and determine the best manner in which the dispute should be resolved.

Arbitration Award
The panel’s decision regarding a claim is referred to as an “award.” It is crucial to understand that this award is considered to be final and binding by all the parties involved. Challenging an arbitration award can be done, but it is very difficult to do and there are only limited circumstances in which you can do so. The time period to challenge the award is short. According to the Federal Arbitration Act, you only have three months, but in some states, the deadline could be less.

Since the arbitration decision is generally binding, you need to have a strong case prepared and should consider involving an experienced securities arbitration attorney.

The Law Firm of Meyer Wilson
The securities arbitration lawyers at the law firm of Meyer Wilson are licensed in Ohio and California and we represent investors nationwide in securities arbitration and litigation claims. We have successfully recovered millions of dollars for our clients. For a free case evaluation, contact us by calling toll-free 1.866.827.6537 or filling out our online form.