To recover losses due to investment fraud or stockbroker misconduct, you will have to file an arbitration claim with the Financial Industry Regulatory Authority, Inc. (FINRA). Filing a complaint with the Division of Securities is a useful first step, the Division does not have the authority to recover funds on behalf of investors.
An arbitration proceeding through FINRA typically has four phases: the filing of the Statement of Claim (which is like a Complaint filed in court to initiate a lawsuit), the selection of arbitrators, an exchange of information (“discovery’), and the final arbitration hearing.
Phase #1. Your securities arbitration attorney will file a “Statement of Claim” on your behalf. This claim will detail your version of the facts related to your securities dispute and a request for damages. Then, your “Statement of Claim” will be served on the broker or brokerage firm (referred to as the “Respondent”) you’re filing your claim against. The broker or brokerage firm will review your “Statement of Claim” and file a “Statement of Answer,” which will contain the Respondent’s version of the facts and a defense against your claim for damages.
Phase #2. One to three FINRA arbitrators will be selected from a random, computer-generated list. The number of arbitrators selected depends on the amount of damages involved in the dispute. The higher the dollar amount, the more arbitrators will be selected. Once the arbitrators have been selected, a prehearing conference will be held. At the conference, your attorney, the Respondent’s attorney, and the arbitrators set the date for the final hearing and make decisions about procedural matters related to the claim, such as the schedule for discovery.
Phase #3. Your attorney and the Respondent’s attorney will exchange information and documentation regarding the facts and circumstances of your dispute. If you and your attorney decide it is a good idea, you may decide to mediate the dispute with the goal of reaching a settlement. If a settlement cannot be reached, your attorney will continue preparations for the final hearing.
Phase #4. Your attorney will present your version of the dispute, and argue against the Respondents’ version, at the final arbitration hearing. After the arguments are presented, the arbitrators will meet and render a final decision, typically within a period of 30 days. Once the decision has been reached, notice will be given to everyone involved. If the arbitrators decide in your favor, and include an award for damages in their decision, the broker or brokerage firm typically has 30 days from the date the award is issued to pay you.
If you believe that you have been the victim of brokerage fraud or that your stockbroker was merely incompetent, contact our firm today for a free consultation and find out whether can get back the monies that you have lost. We are the experienced broker fraud attorney group. The law firm of John Lawrence Allen – your securities fraud attorney – would be honored to have you as a client, and help you reach a successful outcome. For assistance, call us or complete our online form for a free case evaluation.