How FINRA arbitration for securities industry professionals helps

by Hedgeman Law Firm | Apr 29, 2021 | Business

Residents of New York State may want to learn more about what FINRA is and how it may help in resolving disputes. With arbitration as an alternative to litigation, cases may settle more easily and meet the rules of the SEC. The panel’s decision is final, while arbitrators, chosen by both sides, determine the award. Women-owned businesses as well as others may benefit from a resolution arbitrated by the Financial Industry Regulatory Authority, FINRA.

What is arbitration?

According to FINRA, panels resolve a dispute with one to three arbitrators. They are selected by the parties involved. They study documents, listen to arguments, and read the pleadings in order to make a fair decision. Parties must abide by the decision, but FINRA is not responsible to the award.

Arbitration can be quicker and less costly

Turnaround times may be faster than litigation, as the process is less formal. The number of parties as well as the complexities of the issues may affect the time. Claim amount, motions, and sessions as well as the postponements, if any, may affect costs.

What cases are eligible for arbitration?

Some of the cases may include:

Disputes with investors
Disputes involving parties of the industry only

In investor disputes, such as a case between investor and broker, the case must have a filing of within six years of the date the dispute occurred. In cases with the industry, such as among brokers and brokerage firms, a party must be a registrant with FINRA. Filing must be within six years of the dispute.

What cases must arbitrate?

With investors, it is a requirement if arbitration is in a written agreement. Arbitration is a requirement if the dispute is with a member of FINRA, or if it involves a brokerage firm.

If a broker or a brokerage dispute arises from a securities business, industry arbitration at FINRA is a requirement.

If you have a dispute that requires arbitration, it may be smart to hire an attorney or law firm with knowledge and experience with FINRA arbitration. They may help you with professional representation in the proceedings.