How Do I File A FINRA Arbitration? What Do I Do if My Broker has Lost My Money?

You were stunned to see that your recent investment account statement shows that you’ve lost a lot of money. But your broker claims “everything is fine,” urges you just to “hold on” even though you are losing sleep or worse, now refuses to return your calls or emails. What can you do? These are often the first questions we receive from investors upset and confused, often faced with large losses to their accounts.

Often, these are signs that there has been inappropriate and wrongful conduct performed by your broker. Your broker may have invested you in products you did not understand or want. Or worse, your broker may have stolen money from you. You may have to file an arbitration proceeding with FINRA, the Financial Industry Regulatory Authority, to recover your money.

The first major consideration is whether you should hire an attorney to represent you in your FINRA arbitration claim. Recent research has shown that investors who choose not to hire an attorney for their FINRA arbitration received an award in their favor only about one in four times. Your chances for success increase significantly by hiring a competent lawyer with substantial FINRA arbitration experience. There are many good lawyers, but when it comes to FINRA arbitration, you really need an experienced, top lawyer who does these types of cases specifically. The attorneys at Malecki Law have conducted FINRA arbitration proceedings on behalf of hundreds of investors, from intake through resolution.

Chances are, you already agreed to binding arbitration in the “fine print” of your account agreement when you opened your securities account. FINRA Arbitration Rules differ significantly from court rules. For example, unlike in court, discovery can be more limited, and there are very limited appeals permitted of arbitration awards. It is critical that your case be properly managed and presented to the Panel of Arbitrators hearing the dispute.

At Malecki Law, your case will begin with fact gathering. With your help, we compile and review all relevant documents and information to “tell the story” of the loss you sustained as an investor. Every investor’s story is different, so your case will be handled singularly and carefully. In most cases, we will review years’ of your statements and other investment documents, as well as all available emails and other correspondence exchanged between you and your broker. If you held many different accounts, an account analysis may be created to accurately calculate the full extent of your losses.

We then draft and file your Statement of Claim to inform the FINRA Arbitration Panel of your case. While FINRA Rules only require that the Statement of Claim contain a statement of the relevant facts and remedies requested, it is the first document the Arbitration Panel reads, and first impressions matter. The experienced FINRA attorneys at Malecki Law will make sure that your Statement of Claim will weave the story of your interactions with your broker with relevant documentation and thorough research of the trading and conduct that occurred.

After the Statement of Claim is filed, the next critical step involves the selection of the Arbitration Panel. The Arbitration Panel is comprised of three arbitrators for claims of $100,000 and greater, and one arbitration for claims under $100,000. While disclosures made by potential arbitrators are often minimal, we research each proposed arbitrator, using in-house tools and research, to determine who may be most sympathetic to the claims alleged in the Statement of Claim.

Once pleadings have been filed, we then engage in discovery. During discovery, facts are gathered from the broker, their employing brokerage firm, third parties and public sources. Discovery is limited in arbitration, and you generally won’t have to give a deposition. Malecki Law attorneys will carefully review and catalogue the documents and information gotten through discovery to make sure your case is prepared for the final hearing. Motion practice, either with FINRA or in the local courts, may be necessary to compel the firm or other third parties to produce relevant documents.

While we prepare every case for the final hearing, sometimes the parties may agree to engage in a confidential, non-binding process called mediation. Mediation is an effort by the parties to settle the case amicably before the final hearing. Many mediations occur privately outside of the FINRA arbitration, while the case continues to proceed toward the final hearing. Having handled securities arbitrations for investors for years, the attorneys at Malecki Law have built a deep understanding of the securities mediators who may be appropriate for your case. If you choose to engage in mediation, we will work closely with you to present your case for the mediator to provide the strongest position possible for settlement.

Not every case can be settled. If there is no settlement, the case then proceeds to the final hearing. The hearing is much like a court trial: there will be opening statements, testimony given by witnesses, evidence entered and closing statements. We utilize current trial technology, including data management and presentation software, to make sure your case is presented in the most effective way.

The attorneys at Malecki Law have handled FINRA arbitrations across the United States. If you have any questions about recommendations made or actions taken in your securities account, or any further questions regarding the FINRA arbitration process, please contact us for a free and confidential consultation.

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Client Reviews
Jenice and her staff are all excellent - highly responsive, answer as many questions as you have in a way that you can understand, are very patient, sympathetic to your situation, and make you feel comfortable during a difficult and stressful time. I never once had to follow up - they always came to me to keep me updated by phone and mail. I highly recommend them.
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I worked with Jenice and her team to successfully resolve a brokerage / securities related issue for an elder relative and was quite pleased with how they walked us through the process and took into account the challenges that age sometimes unfortunately present. They were all professional - and effective. I would use them again without question if the need arose.
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Ms. Malecki defended a commercial litigation case for my client, and did a very professional job. Her motion practice was direct and she was honest with the client regarding the merits of the various issues involved. She was professionally courteous but also held her ground with opposing counsel as required. Her billing estimates were accurate as well, which was greatly appreciated in order to make appropriate business decisions.
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