What to expect in a FINRA Arbitration?
By Sean Sweeney on October 07, 2014
Most broker dealers include mandatory FINRA arbitration as a part of their customer new account forms. This means that if you have a dispute with your broker, or the company he works for (broker-dealer), you have likely given up your right to pursue those claims in court. Instead disputes are resolved through a panel of one or three arbitrators (depending on the size of the claim) administered by FINRA according to its rules of arbitration.
The FINRA Arbitraiton process differs from a court case in a few key ways:
- Rather than a judge and jury, a panel of three arbitrators decides the case.This carries with it the lack of any meaningful review or appeal process.
- Discovery is extremely limited. The parties are limited to document requests as the means for determining the facts for the final hearing. Requests to admit, interrogatories, and depositions, a mainstay of court litigation, are prohibited (with a few exceptions).
- The rules of evidence at trial (or final hearing) are applied differently than court and sometimes ignored in a FINRA arbitration.
- Filing a Claim
- Choosing a Panel
- Discovery and Pre-Hearing Motions
- The Final Hearing
- Judgment Enforcement and Appeals
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