When a dispute arises between an investor and a financial advisor, the investor is entitled to resolve the dispute through an arbitration process administered by FINRA (Financial Industry Regulation Authority), as long as the financial advisor is registered with FINRA. A FINRA arbitration is both similar and different from a trial in a courtroom, the main differentiating factor being that in place of a judge and a jury, the investment dispute is resolved by one or three arbitrators.
FINRA also has a national jurisdiction, meaning its jurisdiction reaches across the 50 states. This makes FINRA especially unique when juxtaposed with the court system, which abides by a state specific jurisdiction and bar specific jurisdiction, limiting courts and lawyers to initiating and litigating matters within a specific state. Matters that arise under FINRA jurisdiction are handled cross-states and resolved by arbitrators hailing from diverse backgrounds both in and outside the securities industry.
Arbitration of broker-dealer disputes is a prompt and inexpensive means of resolving complicated issues. There are specific federal and state laws which govern the conduct of an arbitration proceeding. One of the most important legal aspects of arbitration is that arbitration awards are final and binding, and are thus subject to court review only on a very limited basis. Parties should recognize, too, that in choosing securities arbitration as a means of resolving a dispute, they generally relinquish their right to pursue the matter through the courts. On the other hand, one of the most attractive features of the arbitration process is its confidential nature. Unlike in the traditional court system in which most cases and documents are open to the public, arbitration is confidential.
If you have received FINRA notification about any type of inquiry, investigation, and or proceedings against you, it is critical that you acquire an experienced attorney. When you are facing a legal concern or are unfamiliar with FINRA arbitration proceedings, it is important that you understand the basics of securities law and what options may be available to you. Call us to schedule a free consultation to discuss your situation. As always, it is confidential. Remember, hiring a skilled and experienced FINRA arbitration lawyer can both lower costs and maximize the potential for a favorable outcome.
The FINRA arbitration attorneys at Lubiner, Schmidt & Palumbo, LLC represent investors, registered representatives, brokers and firms in securities arbitrations and litigation nationwide.