FINRA Arbitration

Bixby Law PLLC is experienced in handling FINRA Arbitration claims to recover investment losses for retirees and other investors. Most claims involving brokerage firms and registered representatives are required to be arbitrated in FINRA Arbitration instead of court. Nearly all brokerage firms require customers to sign arbitration agreements in the fine print of their customer agreements, and courts nearly uniformly enforce such arbitration agreements. Investors harmed by negligence or misconduct by their broker or brokerage firm have the right to seek recovery for the damages in FINRA Arbitration.

FINRA Arbitration functions similar to court litigation in numerous ways, though it comes with some major differences too. Instead of being in front of a judge and jury customers who file claims in FINRA Arbitration have their claim heard by three arbitrators (or one arbitrator for claims under $100,000) who serve as the judge and jury. The FINRA Arbitration process is more private than court litigation, and the arbitrators preside over the administration of the case from scheduling the hearings, to hearing discovery disputes, to ultimately rendering the final award in the case. The reality is that most FINRA cases are settled either through formal mediation or negotiation. However, in the event the arbitration panel renders a final award, the decision is binding on the parties and there are only extremely narrow grounds for appealing or moving to vacate an arbitration award.

There are both pros and cons to FINRA Arbitration. FINRA Arbitration tends to be cheaper than court litigation, and the process tends to move much faster than court litigation with most FINRA Arbitration claims resolving within twelve to eighteen months of filing of the claim. Discovery is also fairly limited – typically only to producing documents and providing some limited information. There are typically no depositions in FINRA Arbitration. At the same time, arbitrators tend to be professionals like lawyers, judges, CPAs, engineers and the like. The typical FINRA Arbitration Panel is less likely than a jury to award substantial damages and one common criticism of arbitrators is that they tend to “split the baby” when it comes to making their decisions.

FINRA Arbitration claims are initiated by the filing of a Statement of Claim that lays out the general claims of the customer. The Respondents will then file a Statement of Answer where they typically deny all liability. The parties are then afforded the opportunity to rank and strike the arbitrators from a list of names. For instance, the parties are provided a list of 10 names for the Chairperson (the chief arbitrator) and the separately represented sides each receive the ability to strike up to four names from the list and then rank the remaining six names from which FINRA will appoint the highest mutually ranked arbitrators. Arbitrator selection is extremely important, and Bixby Law PLLC maintains an extensive database and conducts substantial research in order to try to obtain the best arbitrators possible for each case.

After the arbitrators are appointed, an Initial Pre-Hearing Conference (IPHC) is scheduled where the parties and the arbitrators schedule dates for discovery, motions, the final hearing, and other matters. The parties then engage in discovery and document exchange, and Motions to Compel are often filed. Efforts to reach a settlement via mediation or negotiation typically occur, and reaching a settlement often makes sense for all parties involved. However, at Bixby Law PLLC we recognize that every client has different needs and goals, and we believe it is important that our clients ultimately make the decision on resolving or not resolving their case with the full input and recommendation from our team.

If the claim proceeds to final hearing, a FINRA Arbitration final hearing functions a lot like a trial in court. Opening statements are made, witness are cross-examined, evidence is presented, expert testimony is typically necessary, and closing statements and arguments are provided. After the evidence is presented arbitration panels issue their final award which is typically delivered to the parties within thirty days of the conclusion of the final hearing.

Investors who have potential claims should consult with an experienced FINRA Arbitration Attorney who knows the process and procedure to effectively present their claim to recover their losses. Attorney Michael Bixby has represented approximately 1,000 clients in FINRA Arbitrations, and he is available for a free and confidential consultation for investors looking for experienced and personalized representation. Contact Bixby Law PLLC today to learn more.