How a Settlement is Reached in Securities Mediation

If you have a claim against your broker, whether for unauthorized trading, unsuitability or a different reason, you may be wondering the best way to resolve your dispute. All you want to do at this point is recover your losses and move on. So, what is the best route to follow to reach a settlement with the brokerage firm?

When you have a broker dispute, you are generally looking at mandatory securities arbitration before the Financial Industry Regulatory Authority (FINRA). Arbitration is how the majority of broker fraud cases are handled, as brokerage firms include an arbitration provision in the paperwork that their customers sign and complete.

However, there is another process that you can choose when settling your claim, which is known as securities mediation. Mediation usually encompasses a meeting with all of the involved parties and a mediator. There are also separate sessions held with each side, known as caucuses.

Mediation and arbitration are often pursued on parallel tracks, meaning that a mediation may be scheduled while the arbitration claim is pending with FINRA. In these circumstances, if the mediation does not result in the successful resolution of the claim, the parallel FINRA arbitration continues toward a final hearing.

Given the non-binding nature of mediation, most securities fraud attorneys do not recommend participating in a mediation unless and until a FINRA arbitration is commenced, absent extraordinary circumstances.

Coming to an Acceptable Resolution in Mediation

The purpose of mediation is to encourage both parties to come to an acceptable resolution through a negotiated compromise. In the right circumstances, mediation can assist the investor and brokerage firm review all aspects of the case, including the strengths and weaknesses. The two parties have the opportunity to negotiate until they can agree upon a settlement. If an acceptable resolution has been reached, the following will occur:

• A document, which includes all of the terms of the settlement, will be drafted. As FINRA states on its website, parties can protect themselves by signing this document, also referred to as a memorandum of understanding of essential terms, at the end of the mediation process if a settlement was reached.
• A written settlement will be executed. Once all of the terms have been agreed to, a written settlement is be created and signed. A signed written settlement is final and binding.

If a settlement is not reached, the case can proceed to the next step in the arbitration process. You can learn more by reading our article, Mediation vs. Securities Arbitration – What’s the Difference?

Our Securities Mediation Attorneys May Be Able to Help You

For a free case evaluation, contact the law firm of Meyer Wilson, LPA by calling toll-free 1.866.827.6537 or filling out our online form. Our securities mediation lawyers represent investors nationwide in stockbroker mediation, arbitration and litigation claims.

Be sure to order a FREE copy of attorney David Meyer’s book, Five Signs of Investment Fraud…And What to Do if it's Happened to You. You can learn more by reading the book description below.

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