General Knowledge

All about General Knowledge News

What is FINRA Arbitration?

Financial Industry Regulatory Authority is the body in charge of maintaining order over security firms and experts. They preside over thousands of branches and establishments in the United States. Usually, investors do have several claims against security experts and establishments. These claims are not settled in conventional courts; rather, they go through the FINRA arbitration process. The reason is that investors must sign as part of their contracts with these firms that any irregularities must be settled through FINRA arbitration. Although, this is not compulsory for unwritten contracts. Hence, these codes are used over all forms of arbitrations, just as the conventional court presides over most criminal cases. You can get in touch with FINRA Lawyer – Lisa Bragança for all cases of this type and expect adequate representation.


The maximum period you can file an arbitration claim is usually within six years from the occurrence date. If the arbitration board does not attend to a claim due to failed timing, the investor can proceed to a civil court. However, you must be conversant with the time frame for cases in your state as it varies from place to place. Usually, a judge or a set of jury decides the case in a conventional court. This is not the case for FINRA as the case is decided by a panel that is set up after a claim has been filed. Suppose the claim is over a hundred thousand dollars. In that case, there must be at least two public arbitrators with no expertise in the firm and a private arbitrator connected to the security niche in the panel. The private arbitrator must be armed with adequate knowledge about the security firm’s values and work ethics.


For claims less than a hundred thousand dollars, the panel will have one public arbitrator. If the claim is in the range of twenty-five thousand dollars or less, a hearing will only happen if the investor asks for one. The process of filing a claim starts with the investor getting a statement across to a FINRA branch. The officials there will communicate the claim to the concerned quarters. This claim must contain all important facts and recommended solutions. In addition to the claim, the investor must submit the agreement they signed with the firm and a token charged by the arbitrators. 


After this, the security firm against which a claim has been filed must give a response within a month and fifteen days. If they do not give one, it will be on record that they didn’t provide one and can’t present any at the hearing. The response must contain detailed facts, figures, and counterclaims. They can also involve external parties in the response as appropriate.


After a response has been gotten, a panel according to the claim’s amount will be set up. To ensure fairness, the arbitrators will send thirty random panel members to each parties’ counsel. The representatives can then remove and rank the names. The three top-ranked names will be selected. No party involved in the case can get in touch with the arbitrator without all parties’ presence. The last step is for the selected panel to bring a ruling.