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The FINRA Arbitration Process: What to Expect

Simms Law, P.C. June 14, 2022

Arbitration is an alternative to litigation. Disputes between investors and investment professionals are arbitrated before the Financial Industry Regulatory Authority (FINRA). At FINRA, arbitration panels are composed of one or three arbitrators who respond to pleadings, listen to arguments, study the evidence, and render decisions. When an arbitration panel renders a decision in an arbitration case, it is final and binding on all the parties. Unlike courtroom litigation, arbitration is confidential, meaning that most arbitration documents aren’t available to the public. Below are some tips on what to expect as an investor entering the FINRA arbitration process.

The Timeline

Since arbitration is less formal than litigation, the process tends to be quicker. The turnaround time for arbitration is typically affected by the following factors:

  • The number of parties

  • The number of witnesses

  • The complexity of the case

  • The amount of discovery

  • The schedules of the arbitrators and parties

The cost

Cost in an arbitration case is affected by factors such as:

  • The amount of the claim

  • The number of sessions

  • The number of discovery motions

  • The number of postponements

Cases eligible for arbitration

A case is eligible for FINRA arbitration if:

  • The case involves an investor and an individual or entity registered with FINRA

  • The claim is filed within six years from the event that caused the dispute

Mandatory arbitration

An investor is required to arbitrate at FINRA if:

  • Arbitration is required pursuant to a written agreement

  • The dispute involves a member of FINRA

How Arbitration Cases Are Resolved

Arbitration cases are resolved in a variety of ways. In some cases, the arbitrators reach a final decision. In other cases, the parties enter a settlement agreement prior to conclusion of the arbitration process. In many cases, aggrieved investors receive compensation, both in monetary and non-monetary form, and such compensation can come as a result of either an arbitration panel decision or executed settlement agreement.  

Make Your Arbitration A Success

Many individuals choose to tackle the arbitration process alone. However, despite the fact that arbitration is less formal than litigation, it can still be extremely complicated, and attempting to navigate the process alone can be a mistake. Therefore, in order to avoid missing out on possible compensation, you should strongly consider hiring a Florida investor representation attorney to represent you during the arbitration process.

Fort Lauderdale Investor Representation Attorney

At Simms Law, P.A., one of our primary focuses is the representation of investors—including those investors who believe they’ve been the victims of financial fraud—in both litigation and FINRA arbitration. At Simms Law, we take your concerns seriously, and we are fully prepared to fight for your right to receive compensation for your losses. 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.