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How Investors Initiate Claims with FINRA

Simms Law, P.C. June 14, 2022

The Financial Industry Regulatory Authority (FINRA) regulates securities firms and professionals in the United States. Due to the terms contained in most securities contracts, most claims that investors have against securities firms and professionals are adjudicated through the FINRA arbitration process instead of civil court. During the arbitration process, a panel of neutral arbitrators hears the case, determines liability, and issues an award when the circumstances warrant such an action. Below is an overview of the process by which investors initiate claims with FINRA.  

Initiating a Claim

In order to initiate a claim with FINRA, an investor must file a statement of claim with the nearest FINRA office. The statement of claim must specify the facts upon which the claim is based and must request a specific remedy. In addition, the investor must submit a signed submission agreement, which is an agreement in which the investor agrees to be bound by FINRA rules. Finally, the investor is required to pay a filing fee with the statement of claim. Filing fees vary depending on the circumstances. However, a portion of the filing fee shall be refunded if the claim settles more than ten days prior to the date of hearing. In addition, an arbitration panel can award filing fees to an investor as part of the award when a claim is successful.  

Following the filing of a statement of claim, the opposing party must file an answer within forty-five days of service. The answer must specify the facts upon which the claim is based and assert any defenses. In addition, the opposing party is entitled to bring counterclaims, cross-claims, or third-party claims in its answer to the statement of claim. Like the investor, the opposing party is required to sign a submission agreement. If the opposing party does not file an answer to the statement of claim, or if the answer provided is legally deficient, then the arbitration panel can bar the opposing party from presenting omitted facts or defenses at the hearing.

Investor Representation Attorney

At SIMMS LAW, P.A., one of our primary focuses is the representation of investors. One way in which we assist investors is in arbitration before the Financial Industry Regulatory Authority. In FINRA arbitration cases, our investor clients have often lost money as a result of the inappropriate actions of their financial advisors or brokers. During the FINRA arbitration process, investor representation attorney Mark S. Simms represents the interests of his clients zealously and aggressively. Over the years, SIMMS LAW has represented clients in FINRA arbitrations on both sides of the aisle, including some of the largest broker-dealers in the world, and we have developed a unique understanding of the arbitration process. We utilize this understanding and experience as we fight to achieve the best possible results for our clients. If you are an investor and require expert legal guidance, please contact us for a consultation.