Arbitration

Our attorneys provide skilled representation to a variety of investors and industry participants in disputes over investments, employment and securities intra-industry business, including, but not limited to:

• Individual Investors
• Institutional and Foreign Investors
• Investment Professionals and Advisors
• Traders, Specialists and Floor Brokers
• Brokerage Firms in Intra-Industry Business Disputes
• Structured Finance Professionals
• Hedge Fund Participants

Understanding Securities Arbitration

Investors looking to recover investment losses caused by stockbroker or brokerage firm misconduct may find themselves in arbitration and industry professionals and investment firms may also get in disputes with other industry participants, their employers and the like relating to the business in which they are engaged. Arbitration is an alternative dispute resolution process. Instead of a judge and jury, a panel of one to three neutral people will hear the evidence and reach a decision regarding your claim for losses. Arbitration of securities related claims has dramatically increased since a United States Supreme Court decision in 1987 cleared the way for industry drafted arbitration agreements. If it appears that your investment losses are putting you on the road to arbitration, it makes sense for you to contact an attorney with experience handling such securities claims.

Securities Arbitration Basics

As a general rule, arbitrations may only be used as an alternative to litigation if the parties agree to arbitration or if they have a contract requiring them to arbitrate. Most securities arbitrations take place under the rules of the Financial Industry Regulatory Authority (FINRA), as its members - virtually all brokerage firms - require members to arbitrate customer complaints upon the customer’s request and then create customer agreements containing arbitration clauses.

Chances are that you have already agreed to arbitrate claims. You may in fact be bound to do so. Most members of the brokerage industry commonly put language regarding mandatory arbitration of claims in the paperwork they have customers sign and every industry participant signs a membership agreement and/or a Form U-4 with FINRA requiring arbitration as well.

Whether you choose arbitration or are required to participate in it, most arbitration uses lawsuit-like rules and procedures to resolve claims. During the proceedings, the arbitrators will determine what evidence is heard and then will consider all evidence presented to reach a decision. An investor usually receives a decision regarding their arbitration claim from the arbitration panel within thirty days of the close of the arbitration proceeding.

Typical Investor Claims

Mediation

Mediation in many instances proves a cost and time efficient means of non-binding conflict resolution. It aims to offer effective dispute resolution and avoid the often protracted, expensive nature of litigation. In mediation, negotiation towards a settlement is facilitated by an experienced and independent neutral party. In an array of securities disputes, mediation proves the ideal forum for parties to reach a mutually satisfactory accord. Many arbitrations are resolved through mediation.

• FINRA Resources for Parties: An Overview of Arbitration and Mediation

Conclusion

Depending on the circumstances, arbitration of claims arising from investment related losses may actually be in an investor's interest. Weighing the risks and benefits of arbitration or a trial requires the advice and assistance of a knowledgeable securities litigation attorney. An attorney with experience handling securities related litigation will help you determine which of the forums available to you for your claim offers the best chance of righting the investment losses you have suffered.