The Financial Industry Regulatory Authority (FINRA) defines itself as “a not-for-profit, self-regulatory organization with an 85-year history [that] pursues its mission of promoting investor protection and ensuring market integrity in many ways.” One important component of this organization is its Dispute Resolution Services (DRS), which allows disputing parties to resolve their issues through arbitration or mediation. For instance, a financial advisor who is struggling with an unfair or baseless customer complaint that is damaging their professional reputation on BrokerCheck may seek an expungement request through the DRS forum. It’s important to understand that FINRA does not require either party to retain legal counsel in order to participate in these proceedings. In fact, FINRA’s latest newsletter, The Neutral Corner, included detailed information about parties wishing to represent themselves during FINRA hearings. Those wishing to forgo legal representation are known as “pro se” parties. While moving through the FINRA arbitration or mediation process on your own may involve lower legal costs and a greater sense of control over your case, there are many benefits to enlisting the guidance of an experienced and trusted securities law attorney to support you during this challenging time. Let’s take a look at some of the tips FINRA provides to pro se parties and why it may be worth hiring a knowledgeable FINRA arbitration lawyer to reassure and empower you during these formal proceedings.
Understanding FINRA’s Arbitration Process
First, it’s helpful to get a sense of how FINRA’s arbitration process works. These matters are not decided by a court of law, but rather by a panel of neutral, specially-trained arbitrators. Essentially, a party files a claim, and the formal arbitration procedures begin. Depending on the specifics of the case, an arbitration may involve a discovery process, in-person or virtual hearings, testimonies, and other activities that provide the arbitrators with the information they need to render a final and legally binding decision. FINRA stresses that the arbitrators are not employees of FINRA—they are available to oversee these disputes on a case-by-case basis and are considered independent contractors. The arbitration case remains confidential, but the award becomes publicly available once the arbitrators issue their decision. Either party has the right to hire a FINRA arbitration attorney, but this step is not a legal requirement in order to move through the arbitration process.
FINRA’s Guidance For Pro Se Parties During Arbitration
If a party decides to represent themselves in a FINRA arbitration matter, this decision should be communicated to everyone involved (including the arbitrators overseeing the case). The arbitrators can provide an added amount of clarification at each step of the proceedings to ensure that the pro se party understands their rights and responsibilities. For instance, FINRA urges the arbitrators to offer additional guidance to pro se parties, such as “explaining each procedural stage of the case to pro se parties as it occurs; referring to specific rules and procedures; and giving pro se parties wide latitude to present their case.” Since pro se parties may not have the familiarity with the arbitration process, taking steps to clarify the rules and procedures ensures that the hearings remain fair and efficient for all of the involved parties.
Giving Pro Se Parties More Flexibility to Tell Their Story
FINRA recommends that its arbitrators provide pro se parties with more leeway and flexibility in how they present their case. The recent article regarding tips for pro se parties states that “arbitrators may allow pro se parties to use scripted testimony and slide presentations. While arbitrators are cautioned not to put on the case for pro se parties, asking open-ended, non-leading questions can help fill in the gaps.” In other words, giving pro se parties more opportunities to tell their side of the story, even in less formal or conventional ways, can help to maintain fair and productive hearings to ensure a just outcome.
Providing Pro Se Parties With Clear Expectations and Explanations
Another tip that FINRA offers its arbitrators is to “maintain decorum in the hearing room and address overly aggressive attorneys who may try to intimidate pro se parties with frequent objections and interruptions during their testimony.” However, FINRA also reminds arbitrators that any accommodations offered to pro se parties may trigger accusations of bias by opposing counsel, and it’s up to the arbitrators to ensure that all parties understand the basic rules, responsibilities, and procedures at every stage of the process. Additionally, arbitrators are encouraged to provide citations for the basis of any rulings to ensure that all parties understand the decisions that are made.
How a Skilled Securities Law Attorney Can Support You
If you are involved in an upcoming FINRA arbitration or mediation, forgoing legal representation may seem tempting—especially if you are concerned about keeping costs down. Although participating in FINRA arbitration as a pro se party is certainly possible, it’s worth taking some time to explore the potential benefits of hiring a skilled and experienced securities law attorney to remain by your side during this stressful time. The most significant advantage to working with a trusted FINRA arbitration lawyer is knowing that you have a vocal advocate in your corner to look out for your best interests at every opportunity. Those facing a FINRA expungement hearing may find it particularly advantageous to hire a FINRA expungement attorney to maximize their chances of obtaining a successful and favorable outcome. In the wake of FINRA’s recently amended rules pertaining to the expungement request process, such requests have become harder to pursue because of shortened timelines and stricter eligibility requirements. When you enlist the guidance of a skilled FINRA expungement lawyer, you can improve your chances of obtaining the outcome you’re hoping for.
Judex Law, LLC, is committed to serving financial advisors and professionals throughout the securities industry, helping them successfully resolve any number of compliance or regulatory issues. If you have questions about an upcoming FINRA investigation or you are interested in seeking an expungement of customer dispute information using FINRA’s Dispute Resolution Services, please call our office today at (303) 523-4022 to get started with an experienced and trusted securities law attorney.
