How Long Does FINRA Arbitration Take?
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It often takes large losses for an investor to consider suing his or her stockbroker or financial advisor. However, experienced FINRA arbitration attorneys know that investors may have a claim even if their portfolio realized modest gains. In evaluating a potential...read more
Arbitration through FINRA can help you recover lost finances if you were misled or taken advantage of by a stockbroker or securities broker-dealer. This process is similar to filing a case in court, but FINRA’s process is often faster and uses rules and professional standards as the basis for its claims – something a court case may not look to. The average case that goes to hearing for FINRA arbitration takes around 16 months to resolve, according to FINRA. The FINRA arbitration attorneys at Epperson & Greenidge explain how these arbitration cases work and how long they take. If you or a loved one faced investment fraud or financial negligence at the hands of a stockbroker or financial advisor, call our attorneys today for a free consultation on your case.
Types of FINRA Claims
FINRA (the Financial Industry Regulatory Agency) is responsible for licensing broker-dealers and other financial professionals. They also have Congressional approval to write rules that govern these professionals as a supplement to state and federal laws. Since financial industry professionals need to get licensed through FINRA, FINRA has the authority to revoke their licenses and issue other fines and penalties against these brokers. FINRA uses this power to help investors who have been harmed recover compensation from the brokers that harmed them.
FINRA offers investors the ability to file both claims and complaints, which take different amounts of time and serve different purposes. Claims are like lawsuits in that they ask FINRA for some relief, such as financial compensation for a victim of breach of contract or unsuitable investments. Complaints are requests for discipline used to make FINRA aware of a broker’s suspicious activity. If you want compensation or damages, you must file a FINRA claim, not a complaint.
FINRA offers two primary forms your claim against your broker can take. The first is mediation. In FINRA mediation, the investor (along with their attorney) and the broker meet with a neutral third party to discuss the problem and work out a solution. This may involve a broker offering to reimburse an investor for problems they caused, but all solutions are strictly voluntary. This means that no one orders anyone to do anything and both parties are allowed to walk away at any time.
Arbitration, the second type of claim, is a much stronger process which can result in a binding resolution your broker must follow. Arbitration sends the case before an arbitrator or a panel of arbitrators, who are all financial professionals authorized by FINRA to decide cases. Because your broker is certified by FINRA, they agree as part of their licensing process to submit to any decisions the arbitrator makes. These cases are presented to the arbitrators through a hearing, much like cases that go before a judge in a lawsuit. However, arbitration is often far quicker than filing a lawsuit.
How Long Do FINRA Arbitration Cases Last?
FINRA states that the average case that goes to a hearing during FINRA arbitration takes around 16 months. Cases that settle between the parties before the hearing are resolved much more quickly. In many cases, these cases are far shorter than lawsuits that deal with similar issues.
When you file your case in court, you are subject to the court’s schedule and laws for notice and time to respond. The courts that deal with claims against brokers are the same courts that deal with broader, general issues and lawsuits. This means that your case is competing for court time with all of those claims, and it could be months before you even reach your first scheduled court appearance. In addition, the rules and processes for claims and responses are slowed by statutory requirements that give each party chances to delay the case and take extra time to respond.
Arbitration is designed to be an alternative to court. This means that many of its processes are intentionally simplified to help speed up the process. First of all, FINRA arbitration claims are all similar types of claims, meaning that the arbitrators and parties are usually more familiar with the general structure of each case. Since these claims use arbitrators who are financial experts instead of lay jurors, the claims can often move more through arbitration more quickly. In addition, FINRA’s rules do not give the same requirements for notice and court filings, meaning the process can be streamlined.
Even though 16 months seems like a long time between filing and receiving the compensation you deserve, this process is often still faster than a court case, which can take years of filing motions and responses before you even see the inside of a courtroom.
FINRA Claims Lawyers Offering Free Consultations on Arbitration Cases
If you or a loved one was misled or taken advantage of by a stockbroker, financial advisor, or other broker-dealer, talk to the FINRA claims lawyers at Epperson & Greenidge today. Our lawyers represent the victims of negligent and fraudulent brokers to help them recover financial damages for the harm to their investments and securities. To schedule a free consultation on your case, contact our law offices today at (877) 445-9261.