The Financial Industry Regulatory Authority (FINRA) provides a forum for mediation and arbitration to resolve disagreements and protect investors. In general, a dispute based on your financial advisor’s misconduct could take 12 to 18 months to resolve.
If you have other questions about this process or are ready to proceed with a claim, contact our FINRA arbitration attorneys today.
What Factors Affect How Long the FINRA Arbitration Process Takes?
The official answer from FINRA is that it takes about 16 months to close a case that requires an arbitration hearing. However, several factors could delay this process.
How long it takes to resolve your case through FINRA arbitration could depend on:
- The case facts
- The complexity of the dispute
- Access to and availability of evidence
- The willingness of the parties to engage in settlement negotiations
It is important to remember that FINRA arbitration is not a court of law. This process is set up and governed by FINRA, not the legal system. Each case is decided by an independent arbitrator approved by you and other involved parties.
However, most cases have attorneys working to represent each side, and the final decision is binding. Also, like the legal system, FINRA arbitration is compulsory. Members must respond to claims and participate in the process.
These facts can sometimes make the arbitration process take longer. The organization aims to resolve disputes as efficiently and quickly as possible, but these cases are often resource-intensive and complex.
Understanding the FINRA Arbitration Process
Understanding the various stages of the FINRA arbitration process is essential if you are considering filing a statement of claim. By being informed and prepared, investors can navigate the arbitration process more effectively and work towards achieving a fair and equitable resolution to their dispute.
Talk to a FINRA arbitration attorney today to learn more or get answers to your questions based on your unique case.
In general, the arbitration process includes these steps:
The Initial Stages: Filing and Responding to Claims
The FINRA arbitration process typically begins with the aggrieved party filing a statement of claim. This initiates the formal dispute resolution process. In your case, your lawyer would file the statement of claim on your behalf.
Once the claim is filed, the respondent party—usually a brokerage firm or individual broker—is served and required to respond within a specified timeframe. Generally, this is 45 days.
Preliminary Hearings and Appointment of Arbitrators
Once there is an official statement of claim and response, FINRA provides each side with a list of arbitrators. Each side will remove arbitrators from the list, if necessary, and rank the remaining names.
On smaller customer claims, a single arbitrator decides the case. In larger cases, a three-arbitrator panel hears the claim.
Some cases will likely require more than one hearing. Preliminary hearings occur following the selection of arbitrators and can serve many purposes.
This could include:
- To address procedural matters
- To clarify any issues
- To establish a timeline for the arbitration process
Generally, preliminary hearings help streamline the arbitration proceedings and ensure both parties understand the rules.
Discovery and Exchange of Information
Discovery often occurs concurrently with preliminary hearings. Just like in court cases, what happens during discovery is critical to the outcome of the case. During discovery, the parties exchange relevant documents and information related to the dispute. This phase allows each party to gather evidence, depose witnesses, and prepare their case for the arbitration hearing.
The duration of the discovery phase can vary significantly based on the complexity of the case. Some cases are resource-intensive and have an incredible volume of evidence. It is not unusual for one or both parties to request extensions.
How long it takes to complete discovery can significantly affect the overall arbitration timeline.
Mediation and Settlement Attempts
Frequently, parties opt for mediation or engage in settlement negotiations to resolve the dispute before an arbitration hearing. Mediation offers a voluntary, non-binding alternative to arbitration.
A neutral mediator assists the parties in negotiating for—and often reaching—a mutually acceptable resolution.
The duration of mediation and settlement negotiations can vary depending on each party’s willingness to engage in meaningful discussions and explore potential solutions. While mediation can expedite the resolution process, parties could still choose arbitration if a satisfactory settlement cannot be reached.
The Arbitration Hearing
The arbitration hearing is when the appointed arbitrators hear the case facts. During the hearing, your attorney could call witnesses, present evidence, and make arguments to support your case. The other side will do the same.
An arbitration hearing is rarely a short affair. It can last a few days or several weeks, depending on the complexity of the case, the number of witnesses, and the exhibits presented.
After the hearing, the arbitrators deliberate and determine a final award, resolving the dispute between the parties.
Handling FINRA Arbitration Is Difficult on Your Own
Securities laws are incredibly complex. Add to that the strict arbitration procedures, and it is extremely difficult or impossible to successfully navigate this process on your own. Most individuals rely on a trusted lawyer’s knowledge, experience, resources, and reputation to manage their FINRA arbitration.
Some reasons why working with a FINRA arbitration attorney could benefit you include:
- FINRA arbitration follows specific procedures and rules that are difficult for individuals to navigate on their own
- Without a lawyer who understands these laws and regulations, individuals may struggle to effectively present their case
- A lawyer can help gather and present the evidence in a persuasive, compelling manner
- A lawyer can analyze the facts of the case, identify legal issues, and formulate a strategy to achieve the best possible outcome for their client
- Lawyers are skilled negotiators who can advocate for their client’s interests and help negotiate a favorable settlement
The outcome of your FINRA arbitration matters. Defrauded investors should not suffer financial losses because of their financial advisors’ misconduct. If you believe your financial advisor acted negligently, you want a knowledgeable FINRA attorney on your side.
Our team can provide securities fraud resources, identify how your firm or advisor acted inappropriately, and help you recover money through a settlement or arbitration.
Discuss Your Next Steps With Our FINRA Securities Arbitration Team
FINRA Arbitration Lawyer, Richard Fosher
Oakes & Fosher Law represents individuals hurt by negligent financial advisors in St. Louis. Our securities fraud attorneys know how to navigate FINRA securities arbitration and fight for the money our clients deserve. Call (314) 428-7600 or contact us online today to learn more.
