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Why Investors Should Turn to Securities Arbitration Lawyers After a Loss

Since its inception, the law firm of Zamansky LLC has consistently been among the top law firms to file securities arbitration claims annually. Our firm has recovered tens of millions of dollars on behalf of aggrieved clients. Our securities arbitration attorneys have successfully filed claims against virtually all the nation’s brokerage firms, including all the major Wall Street institutions.

Arbitration, a requirement in brokerage disputes, affords investors considerable advantages. The process is considerably more expeditious than litigation and claims can often be heard within a year of being filed. Securities arbitration also is usually considerably less costly than litigation. Moreover, arbitration claims typically are binding, so brokerage firms cannot file endless appeals and force their clients to rack up extensive legal bills.

Who can file securities arbitration?

Any investor with a U.S. brokerage account can file an arbitration claim, regardless of whether they are a citizen or actually live in the country.

What are the costs associated with securities arbitration claims?

At Zamansky LLC, our securities arbitration attorneys typically work on a contingency or success fee basis when filing arbitration claims, meaning our fee is a portion of the amount we recover. This ensures that our firm’s interests are closely aligned with our clients’ interests. We bill out-of-pocket expenses at cost.

How do investors know whether they have legitimate claims?

Given our extensive experience, we can quickly determine the merits of potential claims. As our securities arbitration attorneys work strictly on a contingency basis, we only pursue claims where we believe there is a reasonably high probability of success. We offer clients a free, no obligation consultation.

What is FINRA?

The Financial Industry Regulatory Authority (FINRA) is an independent, not-for-profit organization committed to protecting investors and market integrity. Although it is not part of the United States government, Congress has authorized FINRA to independently regulate the securities industry in order to make certain that it operates fairly and honestly. FINRA is the largest independent regulator for securities firms in the U.S. and it operates the largest dispute resolution forum in the securities industry.

How can investors recover their losses through the FINRA arbitration process?

Investors can work with a securities arbitration attorney to prepare and file a statement of claim with FINRA. The statement of claim sets forth the facts of the case and the specific relief the investor is requesting. A FINRA arbitration panel will hear the case and reach a decision called an “award.”   The arbitration panel is comprised of one to three arbitrators depending upon the amount and type of relief requested. The arbitration panel’s award is final and binding upon the parties unless it is successfully challenged in court.

What Happens During a FINRA Arbitration Hearing?

All FINRA arbitration hearings follow the same general format and structure. The major stages of an arbitration hearing are as follows:

  • Swearing In – To begin, the arbitrator (or arbitrators), the parties and any witnesses are sworn in under oath.
  • Opening Statements – If desired, each party has the opportunity to present an opening statement. Opening statements are prepared and delivered by the parties’ lawyers.
  • Claimant’s Presentation – The investor’s securities arbitration attorney presents evidence supporting the investor’s claim for damages.
  • Respondent’s Presentation – The broker’s or brokerage firm’s counsel presents evidence in defense of the investor’s claim for damages.
  • Presentation of Counterclaims, Cross Claims and ThirdParty Claims – If the broker or brokerage firm asserts any claims, the broker’s or firm’s counsel presents evidence on those claims.
  • Rebuttal – Both parties have the opportunity to present rebuttal evidence.
  • Closing Statements – Counsel for both parties will present their respective closing statements. The investor chooses whether to go first or last.

A FINRA arbitration hearing may take place on a single day, or multiple days may be necessary for both parties to fully present their statements and evidence. After the hearing closes, the arbitrator or arbitration panel will reach a decision in confidence, and FINRA will mail a copy of the decision to the parties. This mailing must occur within 30 days of the close of the hearing.

A securities arbitration attorney can help investors recover their losses

At Zamansky LLC, our securities arbitration attorneys have more than 60 years of collective experience representing investors in class action and individual arbitration and litigation cases against their brokers and brokerage firms.  In most situations brokerage firms will be represented by legal counsel at all stages of a FINRA arbitration proceeding. Investors who are considering filing a claim with FINRA should seek out the advice and counsel of an attorney skilled in the securities arbitration process. Our financial fraud and securities arbitration law firm offers free consultations and we will review your case to determine the likelihood of securing a successful outcome through the FINRA arbitration process.

What Happens if a Broker or Brokerage Firm Ignores an Investor’s Arbitration Claim?

If a broker or brokerage firm fails to respond to an investor’s Statement of Claim, the investor can file a request for FINRA to bar the broker or firm from “presenting any defenses or facts at the hearing.” The investor may also be able to file for a default award, which is essentially an award in the investor’s favor based on the broker’s or firm’s failure to respond. As a practical matter, most legitimate brokers and brokerage firms will respond to investors’ claims, as the consequences of failing to do so can be severe.

What is Simplified Arbitration?

Simplified arbitration is an option for investors who are seeking damages of $50,000 or less. This $50,000 cap excludes any amounts sought for interest or expenses. With simplified arbitration, a single public arbitrator decides the outcome of the case, and this arbitrator makes his or her decision based on the parties’ written submissions unless the investor requests a hearing.

If an investor requests a hearing in simplified arbitration, this hearing will typically occur via telephone or video conference. Before the hearing, each party will have the opportunity to conduct limited discovery to obtain relevant documents and information from one another. During the hearing, each party will present its evidence and arguments to the arbitrator, and, after the hearing, the arbitrator will issue a binding decision. Once the arbitrator issues a decision, the parties’ rights and obligations regarding enforcement and appeals are the same as those of parties who proceed through non-simplified arbitration.

Types of Evidence Investors Securities Arbitration Attorneys Can Present 

When you have a claim against your broker or advisor, the more documentation your securities arbitration lawyer can present in securities arbitration, the better. Some of the key pieces of evidence you may currently have in your possession include:

  • Your contract with your brokerage firm or investment advisory firm
  • Your account statements from before, during and after the suspected fraud
  • Disclosures, letters, notices and other formal communications you received from your broker or advisor
  • Emails, text messages, voicemails and other correspondence from your broker or advisor
  • Documentation of your education and employment background

Some examples of additional evidence your securities fraud attorney may be able to obtain through the discovery process include:

  • Internal communications between your broker or advisor and his or her supervisor or other firm personnel
  • Internal memoranda and other documents circulated within the brokerage firm or investment advisory firm
  • Your broker’s or advisor’s communications with third parties related to the investment recommendations you were provided
  • Prospectuses, research papers and other documents pertaining to the investments your broker or advisor recommended

Your securities arbitration law firm may be able to collect various other pieces of evidence as well. For example, your attorney can review your broker’s or advisor’s disciplinary history—and use any relevant disciplinary action to help prove that your broker or advisor has engaged in prohibited conduct in the past. Your attorney can also determine if your broker or advisor is the subject of an ongoing federal securities fraud investigation. In many cases, it will be necessary to provide expert analysis of investors’ losses, and your attorney can engage an expert to prepare a report and testify at your securities arbitration hearing if necessary.

There are many additional forms of evidence that can be used to prove stockbroker negligence or investment advisor fraud. Once you engage a securities fraud attorney to represent you, your attorney will examine the facts of your case and determine what specific types of evidence are needed. Your attorney will need any information you are able to provide. So, in addition to collecting the documents listed above, it will be helpful for you to take notes detailing why you believe you are a victim of investment fraud as well.

Our Securities Arbitration Law Firm Shines Light on Arbitration Myths

Myth #1: Securities arbitration lawyers are expensive

Reality: A typical arbitration case is not terribly expensive to litigate. FINRA charges a filing fee which depends on the size of the claim.  There are also some incidental costs, such as copying and FedEx charges. In some cases, there may be travel and expert witness costs, but our securities arbitration attorneys  aim to litigate cases in the most  efficient and cost-effective manner.

Myth #2: The discovery process is intrusive

Reality: FINRA mandates the exchange of certain documents and information. However, this exchange is entirely confidential and no personal information is ever released.

If your rights have been harmed on by the financial services industry, Call us at (212) 742-1414.

Myth #3: Arbitration cases are public

Reality: FINRA arbitration is a private process. The only item that can become public is an arbitration award, which does not typically contain personal information concerning the parties. While the arbitration awards are technically public, anyone wanting to review an award must specifically search FINRA’s website—they are not found through standard search engines like Google.

Myth #4: Securities arbitration is rigged against investors

Reality: While winning an arbitration case is not easy, good cases that are presented well by attorneys specializing in FINRA arbitration can have very strong results. FINRA recently began offering all investors the option of having an “all-public” arbitration panel, meaning that no one with recent ties to the securities industry serves on the panel. These “all-public” panels have helped level the playing field for investors.

Myth #5: My legal fees for a securities arbitration lawyer will be so high that bringing a case isn’t worth the time

Reality: Our investment and securities arbitration lawyers work on a contingency-fee basis. This means that we only earn a legal fee if we obtain a recovery on your behalf. In other words, if for some reason your case is not successful you will not owe us a legal fee. Our contingency fees are reasonable and are meant to ensure that our interests are entirely aligned with yours, a “win-win” proposition.

How Investors Recover Their Award After Securities Arbitration

When an arbitration proceeding results in an award of financial compensation for an investor’s losses, the broker or brokerage firm is generally required to pay within 30 days. However, if the broker or brokerage firm files a motion to vacate or modify the award, the broker or firm may not be required to pay while the motion is pending. We discuss this process in greater detail below.

If a broker or brokerage firm does not pay within 30 days as required, investors can notify FINRA, and FINRA can suspend or cancel the broker’s or firm’s registration. Since this prevents the broker or firm from conducting business, the risk of suspension or cancellation provides a strong incentive for brokers and brokerage firms to pay on time. However, if a broker or firm does not wish to remain in business or does not have the funds available to pay the award or settlement amount when it is due, then the risk of suspension or cancellation may not be enough.

In this scenario, it may be necessary for the investor to seek enforcement in federal court. Federal courts have several options for enforcing brokers’ and brokerage firms’ liability, including garnishing payments or issuing a charging order against the firm. Even so, payment is not guaranteed, and in some cases, investors will need to consider whether it is worth pursuing arbitration in light of the possibility of being unable to collect.

Contact Zamansky, LLC Today

If you are involved in a dispute with a brokerage firm that may require arbitration, or if you have additional questions about the FINRA process, contact our securities arbitration law firm today.  Zamansky LLC offers free, initial consultations and we respond to all inquiries within 24 hours.

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