Are You a Securities Professional or Firm Facing a FINRA Investor Claim and a FINRA Arbitration?

Herskovits PLLC experienced regulatory defense lawyers help brokers, broker dealers and others defend themselves in FINRA’s arbitration process.

Too often when investors lose money in the market they look for someone to blame and some way to recoup their losses - unfortunately brokers, financial advisors, and broker dealers are an easy front line target. Exceptionally eager FINRA investors’ lawyers proactively pitch FINRA arbitration as a relatively quick and easy process to demand refunds, damages, attorneys’ fees and the rest.

With little to lose as investor lawyers typically work on a percentage, there is nothing to stop investors from seeking redress at FINRA arbitration and their counsel jockeying for settlements often based on weak or even spurious claims. A proactive defense in these cases can sometimes lead to a very favorable settlement or early dismissal.

We defend brokers, firms and advisors throughout the FINRA investor claim and arbitration process.

If you or your firm is facing a FINRA customer claim or you anticipate some trouble in the near future, give us a call for a no-cost confidential evaluation of your situation: 212.897.5410

Common FINRA Securities Arbitration Claims

Robert Herskovits and the Herskovits PLLC FINRA arbitration attorneys have defended some of the world’s largest brokerage firms, mid-size broker dealers, and financial professionals – delivering positive outcomes in sometimes very challenging circumstances.

Common customer allegations of broker dealer and financial advisor misconduct resulting in customer losses brought to FINRA arbitration include:

  • Breach of fiduciary duty
  • Breach of contract
  • Failure to supervise
  • Failure to disclose risk
  • Churning
  • Unauthorized trading
  • Misrepresentation
  • Negligence
  • Unsuitability

If a claim is filed, we will use our decades of experience representing securities industry firms and professionals to work diligently in preparing a highly effective response, organize complete discovery and secure expert witnesses to support your case in FINRA arbitration.

Connect with a Herskovits PLLC securities lawyer to discuss your options now in a free, confidential consultation: 212.897.5410 or Report Online

The FINRA Arbitration Process:

(1) Statement of Claim

FINRA serves the claimant’s Statement of Claim on the respondent (defendant advisor or firm), containing the details of the dispute, relevant names, dates and type of relief requested. To be eligible for FINRA arbitration, claims must be filed within 6 years from the time the events giving rise to the dispute occurred.

(2) Answer to Claim

The respondent’s attorney then prepares a written answer specifying the relevant facts and available defenses to the Statement of Claim within 45 days of receipt.

(3) Arbitrator Selection

FINRA uses the Neutral Leis Selection System (NLSS) to generate a random list of arbitrators from FINRA arbitrator rosters to appoint a panel. If the dispute involves over $100,000 in damages, three arbitrators are appointed. For claims involving $50,000 to $100,000 in damages, one arbitrator is appointed. For claims involving less than $50,000, FINRA adjudicates the claim based on legal briefs alone. Both parties must agree to the arbitration panelists.

(4) Prehearing Conferences

FINRA then schedules an Initial Prehearing Conference (IPHC) by telephone in which the arbitration panel speaks with both parties to schedule evidentiary hearing dates, discovery deadlines, briefing and motion deadlines and address other preliminary matters.

(5) Discovery

Attorneys of both parties then request and deliver all documents related to the case. Depositions and other forms of discovery are not often involved in FINRA arbitration.

(6) Hearing

Hearings take place in a location arranged by FINRA. The claimant seeks to prove his claims, the respondent then seeks to establish defenses to those claims and prove any counterclaims.

(7) Decision and Award

After the hearing, the arbitration panel decides what relief is due to the claimant, if any. Awards are based on majority vote in three panel arbitrations. A decision is issued within 30 days of the hearing closure. Arbitration generally takes 12-18 months to complete from the time the claim is filed until a decision is made.

(8) Challenge to Arbitration Award or Decision

FINRA does not have an appeals process and does not hear appeals on arbitration awards. However, the law permits a District Court to vacate or overturn an arbitration award if it finds that:

  • The award was procured by corruption, fraud, or undue means;
  • There was evident partiality or corruption in the arbitrators;
  • The arbitrators were guilty of misconduct in refusing to postpone the hearing or refusing to hear evidence pertinent and material to the controversy, or of any other misbehavior by which the rights of parties have been prejudiced;
  • The arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made;
  • The arbitrators disregarded a clearly defined law or legal principle applicable to the case before them; or
  • There is no factual or reasonable basis for the award.

Appeals are rarely granted in FINRA arbitration. It is therefore vital that you obtain an expert FINRA arbitration attorney to prepare a bulletproof case from the outset.

Act Quickly to Preserve your Rights

Leading U.S. FINRA arbitration lawyer Robert Herskovits and his team have represented broker-dealers, registered investment advisors (RIAs), financial advisors, broker-dealers, banks and others in well over 200 FINRA arbitrations.

There are strict time limits in the FINRA arbitration process so we encourage you to act quickly to preserve your rights and mount a proactive defense.

Robert Herskovits and the Herskovits PLLC team have repeatedly achieved full claim dismissals, decisive defense verdicts and expungement of all arbitration references for our clients. Outcomes vary depending on facts but experience and an exceptional track record should drive your decision on legal counsel.

If you are facing customer complaints or have received notice from FINRA, Robert Herskovits or another Herskovits PLLC FINRA lawyer will explain the process and evaluate your circumstance: 212.897.5410 or Report Online