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FINRA Arbitrations

Investor Claims Have You Suffered Investment Losses due to the Bad Advice of a Broker or Financial Advisor?

Our securities lawyers help investors recover losses through FINRA arbitration

FINRA ArbitrationsEvery day, investors lose their hard-earned money to faulty advice provided by brokerage firms, broker-dealers or financial advisors.

While many investment losses are simply market related, in some cases these losses can be attributed to a financial advisor’s wish to generate commissions, failure to disclose the risks associated with an investment or error in evaluating which investments are suitable for each particular investor.

When an investor loses money, securities or other damages due to a broker or financial advisor misconduct, that investor is entitled to recover those damages.

The Financial Industry Regulatory Authority (FINRA) regulates securities firms doing business within the United States, with the mission to protect investors by enforcing fair and honest operations in the U.S. securities industry.

When brokerage firms, broker-dealers, financial advisors or representatives breach their fiduciary duty to properly represent investments, disclose risks, supervise their brokers or otherwise violate FINRA rules and regulations or federal securities laws, investors have a claim to recover damages through the process of FINRA arbitration.

If you feel that you have suffered financial loss due to a broker or financial advisor’s negligence, fraud or other misconduct, our Herskovits PLLC FINRA arbitration attorneys can help recover your losses through the FINRA arbitration process. Filing an arbitration claim through is quicker and less formal than filing a lawsuit in the court system.

Connect with a veteran of 100s of FINRA arbitration matters, Robert Herskovits or a Herskovits PLLC team member for a confidential, no-cost evaluation of your claim: (212) 897-5410 or Report Online.

Financial Advisor or Broker Actions in Violation of FINRA Rules

Common types of broker and financial advisor misconduct include:

  • Breach of contract: violation of the terms of the written customer agreement outlining the legal obligations of the broker or advisor;
  • Breach of fiduciary duty: financial advisor puts their own financial interest over the best interests of their client;
  • Churning: encouraging a client to participate in excessive or unnecessary trades to generate fees or commissions;
  • Failure to disclose risk: failing to inform a client of the risk of an investment and potential for financial loss;
  • Failure to supervise: brokerage firm fails to properly supervise its brokers, advisors or representatives thereby allowing misconduct to occur;
  • High-pressure sales: implementing aggressive sales tactics or pressuring a client to rush investment decisions;
  • Misrepresentation: presenting untruths about an investment regarding a level of risk or other data characterizing the investment;
  • Negligence: failing to handle an investor’s account in a reasonably prudent manner or failing to comply with industry rules or regulations;
  • Unauthorized trading: failing to obtain a client’s consent before trading on the client’s account;
  • Unsuitability: recommending that an investor invests in a product that does not conform to the client’s level of risk tolerance.
What is the FINRA Arbitration Process?

Investor claims against broker-dealers (investment brokerages), investment advisors and other industry professionals are filed with the Financial Industry Regulatory Authority (FINRA).

FINRA arbitration is less formal and proceeds much quicker than filing a lawsuit in court, and decisions are final with only rare instances of appeal allowed.

Step 1: Statement of Claim

As your FINRA arbitration attorney, we prepare a “Statement of Claim” outlining the activity of the broker or advisor that led to your financial loss. The financial institution then has 45 days to file an answer to this Statement of Claim.

Step 2: Panel Selection

Both parties must agree to the selection of the FINRA arbitrators who will preside over the arbitration proceedings. If the dispute involves over $100,000 in damages, three arbitrators will be selected for the panel. For claims involving $50,000 to $100,000 in damages, one arbitrator will be chosen. For claims involving less than $50,000, FINRA will adjudicate the claim based on your attorney’s legal briefs alone.

Step 3: Discovery

Your FINRA arbitration attorney may request related documents from the brokerage firm. The investor should be able to produce account statements, receipts, correspondence and other documents related to the case. Depositions and other forms of discovery are typically not allowed in FINRA arbitration.

Step 4: Hearing

If the dispute involves more than $50,000 in damages, your FINRA arbitration attorney will attend a hearing before the chosen panel of FINRA arbitrators. Arbitration consists of an opening statement, evidence presentation, witness questioning, cross-examination, and closing statements. The FINRA arbitration panel will then issue a decision within 30 days. Appeals are rare and only granted for clear error of law or fact on the part of the panel.

The entire process of FINRA arbitration is often completed within 12-18 months after the Statement of Claim is filed.

As arbitration decisions are final and appeals are rare, it is vital that you chose a law firm with deep experience and expertise in the intricacies of the securities business, the laws that govern investment advisors, and in the complex FINRA arbitration procedural rules and guidelines.

There are Time Limits to Make Your Claim so Act Quickly to Preserve Your Rights

FINRA arbitration veteran Robert Herskovits has handled over 200 FINRA arbitrations. As experienced FINRA lawyers, the Herskovits PLLC team has taken on many of the nation’s leading financial institutions and recovered millions for investors through FINRA arbitration.

If you have investment losses in excess of $500,000 and believe those losses are related to a broker or financial advisor or broker-dealer misconduct, learn your options for FINRA arbitration today with a no-cost and confidential consultation with a Herskovits PLLC securities lawyer: (212) 897-5410 or Report Online.

Investor Claims Defense 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 attorney 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 arbitration lawyer will explain the process and evaluate your circumstance: (212) 897-5410 or Report Online.

Client Reviews
I give Rob Herskovits and his law firm my strongest possible recommendation. He expertly guided me through a challenging and highly adversarial FINRA disciplinary hearing. Due largely to Rob's extraordinary efforts, each of FINRA's charges were ultimately dismissed by the hearing panel. It is unusual to beat FINRA on their home court, and I'm grateful to have had Rob by my side. Matt D.
Rob has handled customer matters (mediations and arbitrations) as well as regulatory matters for my firm. He is very knowledgeable about the process, and can explain the details in layman's terms. Rob presented our case very well and achieved successful results in every engagement. Jay
I give Robert my highest recommendation. He and his firm helped me through what could have been an extended and financially troubling time. I am not sure that I could have cleared up a false accusation by a previous client had it not been for Robert and his firm, and for that I am very grateful. Derrick
Rob was great he helped my partner and I last year get two cases removed from our record that had no merit. You know how the firms are they represent themselves and settle we suffer. Rob represents you and he’s great!! Jeremy