An Overview of the FINRA Arbitration Process for Investors

For investors who wish to file a claim against a financial professional, the FINRA arbitration process can seem intimidating. However, with the assistance of an investor representation attorney and a basic understanding of the process, arbitration can be an effective and painless way to recoup investment losses. If you have lost money due to the actions of your financial advisor, please review the information below and contact an investor representation attorney as soon as possible for guidance. 

The Process

In most cases, the FINRA arbitration process proceeds as follows: 

1. The Investor Files a Claim

The FINRA arbitration process begins when an investor files a claim. A claim typically contains details regarding the dispute, such as the nature of the dispute, the names of the parties involved, and the type of relief requested. After an investor files a claim, the respondent in the case has 45 days to file an answer.

2. The Parties Select the Arbitrators

Next, the parties choose the arbitrators from a list provided by FINRA. After the arbitrators have been selected, the parties and arbitrators meet for an initial prehearing conference to discuss administrative matters, such as motion deadlines, discovery deadlines, and other arbitration-related issues. Prehearing conferences are often held telephonically. 

3. The Parties Conduct Discovery

In preparation for the arbitration hearing, the parties next request information and documents from one another. This process is called discovery. During this process, the parties are expected to cooperate and exchange discoverable information. However, the parties are permitted to object to discovery requests if such objections are made in compliance with the code of arbitration procedure. Discovery is usually handled by the parties’ attorneys. 

4. The Parties Attend a Hearing

In many respects, FINRA arbitration is similar to a typical courtroom trial. Like a civil or criminal trial, a FINRA arbitration hearing consists of opening statements, motions, testimony, the presentation of evidence, the presentation of facts, rebuttal statements, closing statements, and post-hearing submissions. During an arbitration hearing, the investor, with the assistance of legal counsel, attempts to prove his or her claim, while the financial advisor presents his or her defense. 

Are You A Victim Of Investment Fraud? Let Us Help!  

If you are a victim of investment fraud, we are here to help. At SIMMS Law, P.A., one of our primary focuses is the representation of investors who’ve been the victims of financial fraud by brokers, financial advisors, and other financial professionals. At SIMMS Law, we take your concerns seriously, and we are fully prepared to fight for you in FINRA arbitration and in court. Therefore, if you suspect that any suspicious activity has occurred in any of your investment accounts, or if you believe that you have been misled about the nature and risks of any of your investments, please contact us today for a free consultation.