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Are simplified FINRA arbitrations worth filing?

By Sean Sweeney on December 11, 2017

Are Claimants getting a fair shake in FINRA's simplified arbitrations? 

If you are a customer with a dispute with your broker or the compnay she works for (called a Broker-Dealer), you have likely agreed that you will bring your dispute in FINRA arbitration. If you have a small claim (less than $50,000) then FINRA's simplified arbitration procedure can be used. While FINRA touts this option as a benefit to claimants, pointing to its speed (and 2011 FINRA Win Ratesaccording to the FINRA statistics, it is about 3 times faster- taking about 6 months rather than 18) it is not clear whether it is benefiting the claimants that bring a claim. Having your claim denied quickly is not a benefit. Unfortunately FINRA does not break out its statistics to show the results from these types of cases versus other cases. However, in 2011 a study was done and published on the American Bar website found that the win rate for Plaintiff's Arbitration Bar Association members (or those lawyers that do these cases regularly) won 54.2% of the time versus 40.9% for non-PIABA attorneys and 26.9% for those who represent themselves. 

While this does not tell us exactly how it is that simplified arbitrations performed, given that those claims are more likely to be without a lawyer, it is likely the statistics for recovery are not good.

However, like many things, it likley depends on the facts at issue and how well they are presented to the arbitrator. In our experience, any case that has a swearing match component of it is best to have a hearing. If your claim depends on convincing the arbitrator to believe your version of events and what was said over that of your broker, you are much more likely to do so if the arbitrator gets to hear your story in person. However, for certain claims where there are objective measures ot determine liability such as churning, over-concentration, or annuity switching a case on the "papers" may be appropriate. In those cases we would be able to put together the analysis and point to how the objective facts show a breach of the broker's duty. That kind of presentation, if done correctly, can prove persuasive. If you do choose to pursue a simplified arbitration process, you should hire qualified counsel who can walk you throught the process. While FINRA has produced a timeline to show the expected timeline for those cases, there is more to it than simply filling out the forms and submitting your claim.  

Simplified Arbitration Case Timeline

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At The Securities Lawyers, you get hands-on involvement from a partner level attorney. If I'm on your case, there will be associates and paralegals assisting, but I will be the one trying your case, negotiating settlements, and mediating your case. Sean M. Sweeney

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Milwaukee Office

320 E Buffalo St
Ste 611
Milwaukee, WI 53202

Open Today 8:00am - 5:00pm

Open Saturday and Sunday for calls and emails.

More Info Directions (414) 755-5020