FINRA Arbitration Lawyer

How Does FINRA Arbitration Work?

Since a U.S. Supreme Court decision in 1987, public investors have had to resolve disputes with brokerage firms in arbitration before Financial Industry Regulatory Authority panels. Though originally such process was expected to be a cheaper and simpler alternative to the court system, over the years especially since the 2000 Market Crash and the Great Recession of 2008, it’s even more complex and contentious. Investors thinking of representing themselves should think twice.

Most cases take about a year to complete, depending on the issues and losses involved. The initial filing fee depends on the amount of damages.

First step is having your attorney write a statement of claim outlining the facts and applicable FINRA Rules, federal and state regulations and other laws. Once filed, the brokerage firm has 45 days to respond.

In the meantime, your attorney will work on selecting an arbitration panel that can hear your claims without too much bias in favor of the securities industry. Three sets of 10 arbitrators are among the pool to select from, four may be stricken for any reason, and the remaining six must be ranked.

After the final hearings are scheduled, the rest of the case involves what is known as discovery. Certain items are mandatory for brokerage firms to produce and you must produce certain documents as well, including tax records and statements from any other brokerage firms where you maintain accounts.

Trial can take anywhere from 3 days to a couple of weeks, again depending on the complexity of your case. Once each side has presented its case, the panel has 30 days to make a decision.

For more information on this process, contact Law Offices of Christopher H. Tovar, PLLC at (832) 370-3908, or email us via the form below.