At Meyer Wilson, our attorneys represent individuals who have claims against their stockbroker and brokerage firm for misconduct involving investments. Virtually all investor claims against stockbrokers and financial advisors are pursued through mandatory arbitration administered through the Financial Industry Regulatory Association, known as FINRA.
Our website and videos provide information about different types of investor claims, our case selection criteria and the FINRA arbitration process as a whole. Although many cases are settled prior to a final hearing, you might be wondering what happens at the end of the process if there is a final hearing. If your case proceeds all the way through a final FINRA arbitration hearing, what happens next?
If the FINRA arbitration panel rules in your favor, you will receive what is referred to as an “Arbitration Award.” Once an award is issued, the award must be paid by the responsible party within 30 days of the issue date of the award.
FINRA coordinates with its dispute resolution and enforcement programs by verifying whether a firm or broker has paid an award on time. If the respondent has not paid, FINRA initiates suspension proceedings. If the respondent doesn’t pay the award, they will not be able to continue operating as a broker or brokerage firm.
FINRA arbitration awards are final and are not subject to review or appeal, unless the broker or firm has timely filed a motion to vacate or modify the arbitration award under the applicable law in whatever forum has jurisdiction over the dispute. Although the standards differ slightly across the country, it is well-established that FINRA arbitration awards will only be vacated or modified in rare circumstances, such as if the award was procured by fraud or other serious arbitrator misconduct. In some instances, even if the arbitrators disregard the law or rules of evidence that is not sufficient ground for disturbing the arbitration award.
The laws regarding arbitration awards differ among jurisdictions, so it’s important to be aware of what law controls in your situation. But one of the benefits of the FINRA arbitration process is that typically, if the case is decided in favor of the claimant, the claimant receives payment in accordance with the issued award very quickly.