When you have an investment fraud or stockbroker misconduct claim, you will likely be facing mandatory stockbroker arbitration before the Financial Industry Regulatory Authority (FINRA). The brokerage firm will most certainly have high-powered sophisticated corporate lawyers defending them and trying to beat you. It is therefore imperative that you have an experienced securities arbitration attorney on your side, protecting your interests and fighting for your rights.
What Is Securities Arbitration?
Securities arbitration, an alternative to litigation, is the process of resolving a dispute between parties before a panel of arbitrators selected through a process agreed to by the parties. An arbitration award is final and binding with a limited review available by the courts. Arbitrations are conducted in accordance with the Uniform Code of Arbitration, developed by the Securities Industry Conference on Arbitration, and the rules of the organization where the claim is filed.
Why Are These Cases Handled in Mandatory Arbitration?
At the time you hired your broker, you were given many documents to sign and complete. In most all cases, these papers included a mandatory arbitration provision, which specifically stated that disputes must be arbitrated. Essentially, this provision means the case will not go to court. Most investors don’t pay close attention to this provision until an issue arises.
To initiate a stockbroker arbitration proceeding, you, or your attorney, will need to file a Statement of Claim and Uniform Submission Agreement with FINRA. Once these forms are filed and the appropriate fees are paid, the parties named in the Statement of Claim will be notified.
They must file an answer within 45 days. If the claim proceeds to arbitration, the case will be heard in front of an arbitration panel consisting of one to three individuals. They will listen to the testimony and evidence presented by both sides, before they reach their decision. The panel’s decision is referred to as an award, and is final and binding. There are only very few circumstances in which a stockbroker arbitration award can be challenged.
Mandatory FINRA Arbitration Has Its Advantages
While you may have no other option but securities arbitration, it definitely has its advantages:
- The procedure is simplified, which can ultimately reduce the costs
- Any arbitration award is generally paid quickly after the panel reaches its decision
- Your case will be presented before a panel of arbitrators who have completed training provided by FINRA and who have elected to serve as arbitrators
There Are Some Drawbacks to Arbitration
Arbitration does have disadvantages, such as the following:
- The arbitration award is considered final and binding. Unlike appealing a judgment made in court, it is very difficult to appeal the panel’s decision.
- Pursuing further legal action to recover your losses is generally not permitted. As mentioned above, when the panel reaches its decision, your case is brought to a close.
Make Sure Your Securities Arbitration Lawyer Is Experienced
The brokerage firm will have sophisticated lawyers on their side who are well-versed in the securities rules, regulations, and procedures. You need a securities arbitration attorney who has experience and resources to help you win your case. At Meyer Wilson, we have represented over 800 individual and institutional investors from across the country in securities arbitration, litigation, mediation, and class action lawsuits. We are a law firm that other attorneys turn to when their clients have stockbroker misconduct or investment fraud claims. Our stockbroker arbitration lawyers are licensed in Ohio, California, and Michigan, and represent investors nationwide.
We also encourage you to watch our helpful video to learn more about non-lawyers vs. lawyers in arbitration hearings.