Schifanelli Law, LLP

Integrity, Dedication

& Competence

Contact US  (410) 263-0028

FINRA And SECURITIES INVESTMENT ARBITRATION

If you Are an Investor and have a broker or financial advisor, it's probable that you agreed to arbitrate any dispute that arises between you and your brokerage firm or financial advisor.  or if you are an FA who has been aggrieved by your employer, you may be required to seek arbitration as well. securities and industry dispute arbitration is administered by the financial industry regulatory authority ("FINRA"). 

Integrity, Dedication & Competence

Contact Schifanelli Law, LLP at 410-263-0028 for an initial consultation with a Lawyer in Annapolis.
2450 Riva Road, Suite 201, Annapolis, Maryland 21401.
Serving the Maryland and Washington D.C. Communities.

The Arbitration Process

     The process to recover your financial loss can last a year or more depending on the egregiousness of the broker's act or omission, as well as the amount in controversy.  A successful litigation starts with a well crafted complaint that outlines all of the relevant facts to be proved as well as the causes of action/legal theories why the broker was at fault for the financial losses and why the investor should recover.

     The brokerage will then have ample time to provide an answer to the complaint. Usually its attorneys will assert a variety of defenses, such as alleging that the investor was of the "sophisticated" type and was aware of and approved all transactions.

     After that, FINRA rules provide for a narrow process of discovery exchange between the parties. Some preliminary and dispositive motions, like a motion to dismiss or for summary judgment will be entertained by the arbitrators, but rarely granted prior to the investor presenting his case in chief at an arbitration hearing.

     An arbitration hearing is conducted in person and can be presided over by one arbitrator or an arbitration panel (several public and private arbitrators) depending on the amount in controversy.

     At any time in the process, the parties can agree to mediate the claims without forfeiting the arbitration. However, in either scenario, an investor with financial losses needs an experienced FINRA lawyer to successfully navigate through the process.     

  

FINRA ARBITRATION

     The Financial Industry Regulatory Authority, or 'FINRA', is a self-regulating body that regulates and overseas activities in the investment management industry. It issues rules to which registered investment advisors must adhere when providing investment advice and services to customer investors. These rules include the procedures to be followed when a customer files a complaint or dispute for financial loss against a broker, for example, caused by the broker's financial professionals or its own failure to provide compliance oversight.  

     In such circumstances, investors have already waived their right to file suit in a state or federal court, and have agreed to litigate any dispute in the FINRA Dispute Resolution forum, i.e. arbitration and/or mediation. Most investment agreements require these terms.

     Causes of action against the broker may include:


  • recommending unsuitable investments based on the customer's risk profile
  • churning
  • breach of fiduciary duty
  • negligence
  • failure to supervise    

  

how we can help

FINRA arbitration is a sort of hybrid between a formal civil law case brought in a court of law and an administrative proceeding.  To initiate a case, an investor files a Claim and thereby initiates a "Customer Dispute."  Similarly, a Financial Advisor (or an aggrieved Firm) files their claim to begin an "Industry Dispute."   We represent investors in customer disputes, but also FA's in industry disputes.