Skip to Content

If you have lost money on investments due to investment fraud or have been misled by a brokerage firm or financial professional, you have the right to seek restitution. However, rather than the conventional court process, most securities disputes are settled by the Financial Industry Regulatory Authority (FINRA) through the FINRA arbitration process.

While this form of securities litigation differs from the standard court process, such as taking place in front of an arbitration panel rather than a judge, it is still something that massively benefits from support from experienced securities fraud lawyers.

These specialist attorneys can help any investor with this form of litigation from the initial consultation all the way through to the arbitration itself. Using our extensive experience with FINRA and the arbitration process, we can help clients to achieve the results they seek as part of their claims.

Call Zamansky LLC for a Free Initial Consultation

No investor ever enjoys losing money, but when those losses occur through no fault of their own, it makes perfect sense to pursue those that caused them. It may be a case of a brokerage firm ignoring its duty of care or a financial institution being guilty of negligence or other misconduct. No matter the reasons for the loss, if they were due to something beyond standard market movements, you should speak to a FINRA arbitration lawyer in Florida.

You might be wondering:

  • Do I have a case against my brokerage firm?
  • What will I have to do during the litigation process?
  • What kinds of costs can I expect to pay?
  • Why is Zamansky LLC the right law firm to handle my dispute?

When you call us for a free initial consultation, we will answer all those questions and more, as well as work with you to understand the nature of your case and come up with a plan for the next steps.

Our team is here when you need us, so if you are ready to instigate arbitration proceedings, call us at 212-742-1414.

The Financial Industry Regulatory Authority (FINRA)

The Financial Industry Regulatory Authority, commonly better known as FINRA, is a private corporation that serves as a self-regulatory organization. Most importantly, for investors that feel that other parties have breached regulations leading to securities losses, they regulate brokers, broker-dealers, and many other financial services companies.

It is worth noting that FINRA does not represent the highest level of securities industry regulation in the US. That role falls to the Securities and Exchange Commission (SEC), which operates at a government level. However, when a dispute arises between brokerage firms and an individual investor, it is typically FINRA that will oversee the case.

When compared to the SEC, FINRA can be considered in the same terms as a state bar for securities fraud lawyers or an independent registration board for medical professionals. It has permission from congress to investigate and rule on securities matters and typically does so through an arbitration proceeding.

FINRA does not have the power to create or adjust federal and state statutes, instead maintaining a focus on specific disputes between member organizations, such as brokers, and investors. However, the SEC does pay close attention to FINRA disputes and may take further action against the companies involved in a claim, especially where it affects multiple investors for the same reasons.

Investors will be aware of the multitude of terms and conditions involved with becoming clients with just about any financial services business. Unsurprisingly, most of those conditions are designed to protect the company, not the investor, and one such term involves handling investor complaints through securities arbitration rather than the court system.

What is FINRA Arbitration?

FINRA arbitrations in Florida seek to resolve disputes in security matters between FINRA members and individual investors. As noted, these cases are not heard by a judge or jury. Instead, FINRA appoints experienced individuals to oversee the case. This might be a single arbitrator or could be as many as three arbitrators depending on the expected value of the case.

While your arbitration claim will not be held in a courtroom, there are many similarities to conventional litigation. Both parties are required to admit evidence and argue their case with supporting evidence in front of a neutral third party or multiple arbitrators.

As such, support from an experienced Florida FINRA lawyer can prove invaluable. Not only will they have experience in presenting to the arbitration panel, but experienced counsel can draw on specialist legal knowledge that underpins a robust case and preempts the arguments of attorneys representing brokerage firms.

The FINRA Arbitration Process

Whether an investor faces a single arbitrator or a full panel, they will quickly draw parallels between FINRA arbitration and the standard court process. The investor takes on the role of plaintiff, while brokerage firms are effectively the defendant and the arbitrators serve as both judge and jury.

Before the Arbitration Process Begins

Before FINRA securities arbitrations begin, the claimant must file a statement of claim. This document is typically completed in conjunction with specialist FINRA arbitration attorneys in Florida and outlines the nature of the claim, along with the desired remedies.

The brokerage firm or parties on the other side of the claim will then file a response, again outlining relevant facts and noting their relevant defense against the claims made against them.

If no agreement is reached following the submission of these documents, the Financial Industry Regulatory Authority will commence the process of appointing arbitrators to oversee the case on their behalf. Both parties will receive lists of registered representatives which are chosen at random by an algorithm.

While some investors may feel that there is an inherent unfairness in FINRA’s appointment of a registered representative to oversee securities arbitration involving a member, anyone appointed as an arbitrator will be completely independent. FINRA itself will not provide any input into the arbitration process.

The lists of potential arbitrators are screened both geographically and for any potential conflict of interest. In cases involving a panel of three arbitrators, both parties then receive three lists comprising:

  • Ten chair-qualified public arbitrators
  • Fifteen public arbitrators
  • Ten non-public arbitrators

Upon receipt of the lists, the broker-dealer and the investor can then strike off up to four of the chair-qualified public arbitrators, six of the public arbitrators, and potentially all of the non-public arbitrators.

As part of their work to represent investors, Florida FINRA arbitration lawyers can be extremely useful in the process. Arbitrators are chosen from a select pool, and there is every chance that an experienced investment fraud lawyer will have encountered several potential arbitrators previously and make recommendations accordingly.

One or Three Arbitrators?

The number of individuals on the arbitration panel for each dispute depends on the value of the claim. As noted, claimants must, in conjunction with their attorneys, specify what they expect to receive as compensation or restitution as part of their initial filing.

Simply enough, if the dispute involves a claim of $100,000 or less, it will be heard by a single arbitrator. If the claim’s value exceeds $100,000, both parties will face a panel of three.

Once selected, FINRA’s registered representatives will arrange to speak to both parties as part of the prehearing conferences. There, they will seek to schedule hearings and, where possible, address any preliminary issues that may complicate the arbitration process.

When the FINRA Arbitration Process Begins

Once the arbitration process begins, there are further parallels with a court case. Both parties present their evidence as testimony, and it is also possible to call witnesses, particularly in claims where there are complexities in the nature of the claim.

As your attorney will tell you as part of the initial consultation, the process does not necessarily have to be long and drawn out, and investors do not necessarily even need to present testimony. In simpler cases, there may not even be a hearing. Instead, both parties can submit their cases to FINRA arbitrations on paper, with a judgment reached in their absence.

Naturally, this option is typically faster and more cost effective than a full hearing. However, FINRA arbitration lawyers in Florida typically prefer to judge each case on its own merits. If they determine that a rules breach is significant or complex enough that they and their clients should appear in person, then the associated costs should not dissuade them from doing so.

The End of FINRA Arbitration

Once the hearing is concluded, the responsibility falls on the arbitration panel. In cases of just one arbitrator, they may need time following the hearing to reach a decision based on the information provided to them.

Where there is a full arbitration panel, they will usually retire from the hearing to deliberate. No matter the size of the panel, they have the authority to issue a decision that is binding in law – all parties agree upon commencing the securities arbitration process that they will abide by whatever decision is reached.

Ultimately, arbitrators will settle on a final, written award. This is issued to all parties within thirty days of closure of the record and does not necessarily require those that made the decision to include any reasoning. Furthermore, this typically marks the end of the process outside of particularly exceptional circumstances, meaning no scope for review or appeal.

Alternatives to FINRA Arbitration

Unfortunately, it is generally not possible to litigate against brokerage firms and other financial services companies without going through the FINRA arbitration process. In most disputes, it is not possible to sue a broker-dealer and fight them in court as you would with many other businesses, and this generally comes down to the terms and conditions.

This is known as mandatory arbitration. Investors must arbitrate disputes at FINRA if the arbitration process is incorporated in a written agreement, such as a contract of service, or if the dispute is with a FINRA member. Mandatory arbitration also applies if the intended litigation involves a broker’s securities business.

When brokerage firms or, indeed, any type of financial institution takes on new clients, they typically subject applicants to a long, detailed, and, most importantly, iron-clad application process. As part of that process, investors can only work with a specific business if they acknowledge that investor complaints, even in the case of securities fraud or other misconduct, fall under the jurisdiction of FINRA arbitration in Florida.

FINRA Mediation

Rather than committing to securities arbitration, either party may request to enter FINRA mediation. This process is voluntary and informal and seeks to help parties to resolve a dispute without passing a formal judgment that is bound by law.

Investors that have raised disputes with broker-dealers or other parties may wish to consult their securities fraud lawyer on the merits of opting for mediation over arbitration. The latter can prove challenging in terms of both cost and time for the defending party, and they may be willing to reach a compromise. Naturally, this also removes the risk of being compelled by law to accept an arbitrator’s decision.

It is important to keep in mind that mediation is typically faster and more cost-effective than litigation or arbitration. As a voluntary procedure, investors do not give up their right to pursue litigation or arbitration if they are unable to reach a mutually acceptable decision.

FINRA itself notes the potential success of mediation as an alternative to litigation. It claims that four in every five cases that enter mediation in the FINRA forum are resolved successfully. Of course, that means that twenty percent of those cases require further action, but your Florida FINRA attorney will be able to advise on the best chances of success and what to expect from each.

Speak to a Specialist Investment Attorney Today

If you have lost money through investment fraud or any other poor practice by a broker, you need to speak to a securities fraud attorney that works to represent investors aggressively and decisively in the face of the robust defenses of brokerage firms.

Securities arbitration is almost inevitable when an investor enters into a dispute with a broker, and our FINRA arbitration attorneys are perfectly equipped to guide our clients through the entire journey.

As lawyers with combined decades of experience in the securities industry, we understand the arbitration process from every angle and invite investors to draw upon all of the experience and expertise in law that our firm provides.

At Zamansky LLC, our head office is on Wall Street, ensuring our attorneys are always close to developments in the financial services industry. We also have an office in Miami, ensuring that any investors seeking a Florida FINRA arbitration lawyer benefit from local knowledge precisely where they need it.

As well as experienced counsel, our lawyers take great pride in an open and honest approach. Initial consultations with clients are available without obligation, and we will give you a realistic overview of where your case stands now, what to expect and whether litigation and specifically securities arbitration represent the best course of action.

Furthermore, we take on many typical FINRA arbitration cases on a contingency basis. This ensures that when our lawyers indicate that you have a good chance of receiving the restitution you are looking for, we are every bit as invested in achieving that outcome on your behalf as you are.

We encourage all clients not to be daunted by the prospect of entering arbitration. FINRA may be a large organization that enforces rules and regulations involving brokers and other members, but it remains entirely neutral throughout this type of litigation. Likewise, brokers will aggressively defend themselves against claims made against them during FINRA arbitrations. However, in working with Zamansky LLC, you can rest assured that your attorney will be every bit as aggressive to ensure a firm and fair outcome.

If you are exploring your options following investment losses that you believe may not have been solely down to market fluctuations, or you have already started to build a case against your broker, and you are ready to contact FINRA about arbitration, our attorneys are standing by to help.

Call the Zamansky LLC team for a free consultation now at 212-742-1414.

Client Reviews

View More