FINRA Securities Arbitrations

FINRA Securities Arbitrations

Do You Need a Lawyer for a FINRA Securities Arbitration?

If you or your company is involved in an investment dispute that has been referred for arbitration under the rules of the Financial Industry Regulatory Authority, you need an attorney. More to the point, you need a legal representative who knows FINRA rules and procedures, understands federal and state securities laws, can assess the accuracy and fairness of stock and property valuations, and can make sure you have the right parties involved and a good team of experts on your side. Finding a lawyer with those qualifications is not always easy, but doing so is essential to maximizing your odds for achieving your desired outcome from the sale or purchase of securities.

Fortunately, lawyers in the Columbus, Ohio, office of Leist Warner have many years of experience representing clients in FINRA securities arbitrations. In cases ranging from simple disagreements over the appropriate price for the transfer of securities to accusations of fraud, stockbroker misconduct, and antitrust violations, individuals and corporations have counted on us to protect their rights and interests.


What Happens During a FINRA Arbitration?

Think of a FINRA arbitrator as a financial referee. The arbitrator issues binding decisions regarding disputes between parties to a transaction involving securities. Even if the incident that created the need for arbitration constitutes a crime, the process counts as a civil proceeding. Awards and settlements take the form of monetary damages, reimbursements, and restitutions. A losing party may also agree to temporarily or permanently surrender some property and professional privileges, such as a license to sell investments.

All parties to a FINRA arbitration must agree to take their dispute out of court and to abide by the ultimate decision. This agreement can be reached before any dispute arises when language regarding arbitration is included in an investment contract. Any appeal of an arbitrator’s ruling must occur outside the FINRA system or be resubmitted as a completely new dispute, which are both longshots. With very limited exceptions, a civil court will only hear an appeal when evidence exists that an arbitrator committed fraud or showed undue favoritism, an arbitrator far exceeded his or her authority to impose an award, or an arbitrator’s decision is completely irrational based on the facts. Given the practical difficulty of proving these on appeal, FINRA arbitration is most likely to be a one-shot chance, and you must get it right the first time, which is why you need an attorney with a successful track record of FINRA arbitrations.

Parties to FINRA arbitrations have many of the same rights and obligations as plaintiffs in a civil lawsuit and some that are very different from those in a civil lawsuit. In some cases, these differences can create pitfalls with devastating consequences for investors and attorneys not familiar with the FINRA arbitrations. At Leist Warner our attorneys have been through many FINRA arbitrations and will make sure your claims do not end up dismissed due to the pitfalls of FINRA arbitration.

Parties named in a FINRA arbitration claim must reply to all claims with information relevant to the dispute. Failing to do so can result in a default decision in favor of the claimant without an extensive hearing. Lawyers for all parties can review and add to that information through a process called discovery. Representatives of the parties to the investor dispute, as well as experts, can also be questioned through a process that resembles a deposition.

Parties to the arbitration have equal chances to make their cases to the arbitrator or arbitration panel during one or more hearings held at a time and in a place named by FINRA’s representative. If the arbitrator determines that the parties have relatively equal claims regarding what represents a fair and just outcome, he or she can order the parties into mediation rather than making an award. During a mediation, the parties and their lawyers negotiate to reach a mutually acceptable result. That procedure is meant to be collegial and respectful, but attorneys should still be involved.


Get Help With Your FINRA Securities Arbitration

We at Leist Warner have extensive experience with a variety of securities and investor disputes. We can help with cases involving stocks, bonds, annuities, and other investment products. Contact us online or call (614) 222-1000 if you need help with a potential investment related claim. We offer no-cost consultations to individuals and potential corporate clients.

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