Can You Appeal a FINRA Arbitration Decision?
What is FINRA Rule 2010? FINRA Rule 2010 is a broad, sweeping rule that is utilized to address misconduct that is not directly addressed by another FINRA rule. The rule is centered around the use of ethical business practices by brokers and financial institutions....read more
FINRA arbitration is designed to help investors get compensation for the financial harm they suffered from financial negligence, trade churning, or other harmful investment or sales practices. Sometimes, evidentiary issues or problems with legal interpretations might prevent you from getting the decision you want. If your case was unjustly decided against you or the award you received was too low to cover your needs, you might be entitled to challenge the decision in your FINRA arbitration case. Epperson & Greenidge’s FINRA arbitration attorneys explain how you may be able to appeal or fight the decision or award in your FINRA case.
Is a FINRA Arbitration Case Final?
When an arbitrator or panel of arbitrators hears your case, their decision is binding. This means that you and the broker-dealer who harmed you are held to the decision the arbitrator makes; the broker must pay you if they lose the claim and damages are awarded. Many of these cases deal with arbitrators’ decisions on factual issues, such as whether a broker violated the brokerage agreement, as well as legal issues, such as definitions of when transactions might be unauthorized trades.
If the decision in your case was based on serious errors, you may not be bound by the decision. In these cases, you could be entitled to have the decision vacated and have the case reheard.
Appealing Arbitration Decisions from FINRA
If you are unsatisfied with the decision, you may be able to challenge the arbitrator’s award. Usually, in a formal appeals process, you have the right to take your case to a higher level within the court system or regulatory agency and have them review the decision made below. If they find legal errors or problems with the decision, they might overturn your case or send it back for a new hearing. Technically, FINRA does not have an appeals process, but you can still challenge the arbitrator’s decision, in certain circumstances.
State and federal law create numerous situations where arbitration decisions might be overturned. Federally, these situations are governed by 9 U.S.C. § 10, but each state has its own laws. Under federal law, an arbitration award must be vacated if the award was issued under any of these circumstances:
- The award was based on “corruption, fraud, or undue means”
- The arbitrators were biased or corrupt
- There was arbitrator misconduct dealing with refusal to postpone a hearing or hear evidence (or “any other misbehavior”)
- The arbitrators overstepped their powers or neglected their duties to the point where the award is unclear or indefinite
In these situations, you can take the case to court and have them vacate the arbitrator’s decision. This could give you another chance to take the case back to arbitration. Courts may find other justified reasons to overturn an arbitrator’s decision. The two primary reasons this may occur are for “completely irrational” cases, where the arbitrator’s decision makes no sense, or for “manifest disregard,” where the arbitrator ignored clearly established law. Usually, arbitration is an alternative to taking your case to court, and you agree to follow the arbitrator’s decisions. However, fundamentally flawed or unfair arbitration cases cannot be allowed to stand.
Hiring a FINRA Arbitration Attorney
If you are taking your case to arbitration through FINRA, it is important to talk to an attorney about your case. Since there is no way to appeal your case, you must present the strongest case you can the first time through. The arbitrator’s decision is final, and if you are unable to present a clear or strong case, your case could be dismissed without issuing you an award. When this happens, you may not get a second chance to file your case or save the decision through appeals.
Instead, you should hire an attorney to bolster your case from the outset. An experienced FINRA claims lawyer can help you file your case with the proper language and phrasing of issues to present a strong case. Our experience can work for you, especially when it comes to selecting arbitrators for your case, collecting the right evidence during discovery, creating a strong case strategy, presenting the right testimony and evidence at the hearing, and negotiating potential settlements with the other parties.
Free Consultations on FINRA Arbitration Claims for Injured Investors
If you, or a family member such as parent or grandparent, was taken advantage of by fraudulent investments, unauthorized stock trades, or other forms of financial negligence, talk to an attorney about your case today. You may not have the grounds to appeal or challenge a FINRA arbitration decision, so it is vital to present the strongest case you can at your hearing. For a free consultation on your case, and for help understanding what a FINRA claims lawyer can do for you, contact Epperson & Greenidge, LLP today at (877) 445-9261.