The Arbitration Process

Arbitration is a form of alternative dispute resolution (ADR) outside the judicial system, where parties submit their case to one or more arbitrators for a decision that is legally binding on them.

The arbitration of securities related cases is generally the result of a contractual agreement between the parties. The agreement which is signed by the customer when hiring a brokerage firm to provide them with investment advice contains an arbitration clause requiring the parties to arbitrate any disputes between them. FINRA, the Financial Industry Regulatory Authority, is the governing body which promulgated the Code of Arbitration Procedure and presides over the hearing process.

The steps in any securities arbitration include the following:

  1. Filing the Claim
  2. Selection of the Arbitrators
  3. Initial Pre-Hearing Conference
  4. Discovery Process
  5. Mediation and/or the Arbitration Hearing

Do I need a lawyer to file an arbitration claim? There is no requirement that your claim be filed by an attorney and it is possible to file a claim individually, or pro se. However, it is not advisable to attempt to handle your claim alone without representation for the following reasons. The brokerage firm will be represented by an attorney who specializes in defending securities arbitration cases. He or she will have handled many cases just like yours and have a working knowledge of the discovery process and how to successfully present evidence to the arbitrators in order to win. Furthermore, they will know which arbitrators to avoid and the ones to select that will be most favorable to their case. Consequently, it is never a good idea to try and represent yourself in a securities arbitration matter.

Our firm has a team of attorneys, consultants and others with more than 100 years of combined experience in the securities industry and securities law. Since 1990, we have represented thousands of investors nationwide to recover their investment losses. We have represented clients in federal and state courts and in arbitration through the Financial Industry Regulatory Authority (FINRA), New York Stock Exchange (NYSE), National Association of Securities Dealers (NASD), American Arbitration Association (AAA) and in private arbitration actions.

Please contact our firm for a confidential, no obligation consultation. Cases are handled on a contingency basis.

Stockbroker Fraud Blog - Arbitration
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