Investment is a great way of achieving financial wealth and security in the U.S. As such, millions of people try to make investments, including retirees who don’t have a salary anymore and rely on the income from their investments.
However, not all investment opportunities are the same. Many people and organizations prey on investors, especially those who are still new to the scene.
The good news is there are ways investors can pursue when wronged by the other party during the transaction. One such way is by finding a lawyer whose specialty is FINRA arbitration.
What Is FINRA Arbitration
To fully grasp what FINRA arbitration involves, you first need to understand what FINRA is.
FINRA, full for Financial Industry Regulatory Authority, is a government authorized non-profit organization in the U.S. that oversees financial brokers and security firms in the country.
Stockbrokers, financial advisers, and all other professionals working in the investments sector are obligated to work within FINRA’s rules and regulations to protect investors and ensure integrity and fairness within the country’s financial markets.
If the actions of a securities firm or broker-dealer violate the industry standards and laws, or act in a way that results in investment losses, investors are well within their rights to file a claim.
As per FINRA, some of the most frequent disputes that result in arbitration claims include:
- Fraud
- Elder abuse
- Churning
- Misrepresentation
- Negligence
- Breach of fiduciary duty
- Omission of facts
What Does the FINRA Arbitration Process Entail
Let’s try and break down how the FINRA arbitration process goes in a nutshell.
The process starts when the investor makes a legal complaint with FINRA by filing a statement of claim with the organization. Investors are allowed six years from when their claims arose to file a statement of claim.
Once the filing fee has been paid and the investor meets all filing requirements, FINRA will serve the broker or securities firm with the statement of claim. At this juncture, the respondent will file a response.
Depending on the input from both parties, FINRA will then choose the arbitrators and schedule a date and deadline for hearing proceedings to take place.
The hearing proceedings are sort of like a mini-trial. Each party will deliver an opening statement, and present evidence and witnesses. Both the investor and the respondent will also get the opportunity to cross-examine each other’s witnesses.
The arbitrators will then deliver a decision based on the arguments and evidence brought forward. This decision is often final, and both parties are restricted by the terms of the decision unless overturned by a court of law, and within a statutory timeline.
What Does a FINRA Attorney Do?
A FINRA lawyer represents the investor and presents their claims to order the broker or brokerage firm to compensate the investor for their losses. The attorney basically protects the investor’s interests and helps them recover their losses as a result of the broker or securities firm’s misconduct.
If you believe that you’ve suffered investment losses because of your financial advisor’s misconduct, a FINRA attorney can advise you on the steps you should follow to handle the matter.
Here is a list of more benefits you can expect from your FINRA arbitration attorney.
1. Review Your Case Thoroughly
A professional FINRA attorney should review the details involving your case so they can prove that your financial advisor did in fact contribute to your loss out of their misconduct or negligence. This will allow them to determine whether you have a solid claim.
You can expect your lawyer to take a look at the promises your broker gave you, all official communications between you two, your account statement, and your understanding of what exactly it was you were investing in.
2. Draw Out an Actionable Plan
After the arbitration attorney has assessed your claim, they will try and present the possible options you have depending on what they find.
If they find that you don’t have a viable claim, they may try to dissuade you from pursuing the matter further. But should you have a solid case, the attorney will try and explore all available options to settle the matter, either through FINRA mediation or informal negotiation.
3. File a Statement of Claim with FINRA
Should the broker or securities firm decline to cooperate, the attorney can help you take legal action by filing a statement of claim. It is very vital to your case that your statement of claim is backed by solid evidence and well-reasoned.
4. Present a Solid Case During Arbitration
Your FINRA attorney will help you get ready for the arbitration proceeding. At this stage, you want a lawyer on your side with the right experience and expertise to present their arguments and statements as well as cross-examine witnesses.
Hiring a FINRA Arbitration Attorney: What to Consider
Due to the sensitive nature of the situation, you must hire a FINRA attorney who will take the time to understand your case, and give you the best legal service possible.
But, how do you go about hiring a FINRA attorney who you can be sure will be professional and committed to your case?
Here are some questions you should ask all the FINRA arbitration attorneys who you choose to vet:
1. What Is the Attorney’s Field of Focus
There are many different fields of law, requiring specialized attorneys to understand the specific laws and regulations that govern that particular field. As such, you can’t hire a lawyer, say for instance, who’s focused on criminal law to take on your case.
Instead, hire a lawyer focused primarily on securities law and with the right experience in handling FINRA arbitration cases.
2. What Do Past Clients Have to Say About Them
Before paying a lawyer’s retainer, you need to consider their reputation.
What do their past clients say about their service? What was the nature of those cases? Do they have a good track record of success?
3. Are They Brutally Honest?
You don’t want an attorney who tells you what you want to hear. Instead, hire one who will give you clear-cut, honest advice if you have a solid case. Doing otherwise is a sure path to disappointment from the expectation of unrealistic promises.
