The Financial Industry Regulatory Authority (FINRA) states that its mission is to “protect investors and safeguard the integrity of our vibrant capital markets to ensure that everyone can invest with confidence.” In order to live out this mission, one of FINRA’s roles is to operate “a dispute resolution forum for investors, member firms and their representatives to provide a fair and efficient venue to handle securities-related disputes.” When securities-related disputes arise between investors and member firms, FINRA’s Dispute Resolution Services (DRS) provides a forum in which the parties can resolve these disputes fairly and successfully.
As an individual financial advisor or member firm, finding yourself involved in a contentious dispute can be overwhelming and stressful, especially if you are not familiar with the FINRA arbitration process. That’s why enlisting the services of a highly experienced and caring FINRA arbitration lawyer is greatly encouraged, as you can rely on this dedicated legal advocate to guide you through every step of the process with greater understanding and reassurance. Together, you can prepare for the FINRA arbitration hearing and receive the trusted answers you deserve to every question that arises along the way. Let’s take a closer look at some of the top tips for preparing for a FINRA arbitration hearing and the benefits of working with a highly qualified and trusted securities law attorney to support you through this process.
Key Steps in the FINRA Arbitration Process
Before we address what happens during a FINRA arbitration hearing, it’s helpful to take a step back and examine the steps that lead up to the hearing itself. According to FINRA, “Arbitration is similar to going to court, but faster, cheaper and less complex than litigation. If the case settles, an arbitration will last around one year. If the case goes to hearing, an arbitration typically takes 16 months.” Here is a general outline of the FINRA arbitration process, whether or not the matter proceeds to an arbitration hearing.
The Claim is Filed
All FINRA arbitration actions begin when a claimant files a claim. For instance, an investor may file a claim against a firm or individual financial advisor, providing information like a description of the dispute, the parties involved in the dispute, and the amount of damages the claimant is seeking to recover.
The Respondent Submits an Answer
The financial firm or individual broker named in the claim must arbitrate with the claimant. They will receive a “Claim Notification Letter” that informs them of the impending claim against them and the date and time that the hearing will take place. The claimant has 45 days in which to submit an answer.
Arbitrator Selection and Initial Prehearing Conference
Next, the arbitrator (or, in cases involving larger customer claims, a panel of three arbitrators) will be randomly selected by FINRA from a list of qualified arbitrators. The parties will then attend an initial prehearing conference with the arbitrators, which typically takes place via video conference. This conference will review the procedural details, mediation alternatives, and schedule the hearings.
Discovery
The discovery process allows the parties to exchange information and documents, as well as identify the witnesses that will appear at the hearing. This process can be lengthy, especially if there are copious amounts of documents and information that needs to be reviewed and exchanged.
Attending the FINRA Arbitration Hearing
If the case has not been settled, the arbitration hearing will move forward. During the arbitration hearing (which can be held online or in person), the parties will present their cases, introduce relevant documents and witnesses, and cross-examine the other party’s witnesses. The arbitrator(s) will then render a decision and provide it to the parties within 30 days of the arbitration hearing.
The Role of a Witness at a FINRA Arbitration Hearing
Witnesses often play key roles in FINRA arbitration hearings. FINRA’s most recent quarterly report, The Neutral Corner, reviewed the procedures for questioning witnesses during arbitration hearings and reminded arbitrators to maintain neutrality and impartiality when asking questions of witnesses during the hearing. Whether you are preparing to serve as a witness at an upcoming FINRA arbitration hearing or you are a financial advisor whose strategy relies on strong and reliable witnesses, it’s helpful to understand their roles and responsibilities during this process. Witnesses would review all relevant documentation beforehand to ensure that their statements align with any previous statements or emails they wrote. Their primary role is to establish the facts of the case, so they have an obligation to be honest when responding to questions from attorneys and arbitrators.
Tips For Preparing For a FINRA Arbitration Hearing
As you prepare for an upcoming FINRA arbitration hearing, it’s natural to feel anxious about how this process will unfold. The best way for you to navigate this process with greater ease and understanding is to partner with a highly experienced and caring FINRA arbitration attorney who can answer your questions along the way. Here are just a few steps you can take to prepare for a smooth and successful FINRA arbitration hearing experience.
Build a Clear and Compelling Narrative
You and your securities law attorney can establish a clear account of the dispute and how the claimant’s allegations are frivolous, erroneous, or downright false. Your attorney can help you prepare a chronological account of the events leading up to the hearing that undermines the strength and accuracy of the claimant’s account.
Select Strong Witnesses to Support You
Your attorney can identify trusted witnesses who can provide detailed information in support of your position. Thoroughly preparing these witnesses for cross-examination will further strengthen your case.
Partner With a Top FINRA Arbitration Attorney
Although you are not required to hire legal counsel to represent you in a FINRA dispute, doing so is highly encouraged. With a knowledgeable and experienced securities law attorney by your side, you can trust that your best interests will be protected as much as possible.
Get Started With a Trusted and Dedicated FINRA Arbitration Attorney Today
At Judex Law LLC, we recognize how daunting the prospect of a FINRA arbitration hearing can be. That’s why we are fully committed to guiding you through every step of the process, answering your questions and addressing your concerns as they arise. Please reach out to our Broomfield, Colorado office today by calling (303) 523-4022 to get started with a highly experienced and friendly securities law attorney.