Our recent cases involve broker negligence, unsuitable investment recommendations, elder investor abuse, and supervision failures, pursuing investor recovery through FINRA arbitration against brokerage firms and registered representatives nationwide.
FINRA Arbitration & Broker Negligence
FINRA Arbitration & Broker Negligence
- With offices in New York and California, MDF Law represents investors nationwide as a FINRA arbitration attorney for claims against brokerage firms, financial advisors, and registered representatives. Our practice focuses exclusively on investor recovery in disputes involving broker misconduct, unsuitable investment recommendations, elder investor abuse, and securities fraud.
- Most investors do not have the option to sue their brokerage firm in court. Instead, nearly all investment account agreements require disputes to be resolved through FINRA arbitration. Working with an experienced FINRA arbitration lawyer can be critical to recovering losses and navigating a process that brokerage firms are well-equipped to defend.
What Is FINRA Arbitration?
- FINRA arbitration is a mandatory dispute-resolution process administered by the Financial Industry Regulatory Authority (FINRA), the organization that regulates broker-dealers and registered representatives in the United States. When an investor brings a claim against a brokerage firm or financial advisor, the dispute is typically decided by one or more neutral arbitrators rather than a judge or jury.
- Arbitration is formal, evidence-driven, and binding. Arbitrators hear testimony, review documents, apply securities laws and FINRA rules, and issue a written award that resolves the dispute. Unlike court litigation, FINRA arbitration offers very limited appeal rights, making preparation and strategy especially important.
Why Investors Need a FINRA Arbitration Attorney
- Brokerage firms are repeat participants in FINRA arbitration. They defend claims regularly, are represented by experienced securities defense counsel, and rely on compliance records, internal policies, and expert testimony to minimize liability.
- Investors, by contrast, are often navigating arbitration for the first time—after suffering significant financial losses. A knowledgeable FINRA arbitration attorney helps level the playing field by identifying violations of FINRA rules, framing claims effectively, and countering common defense arguments.
- Many FINRA cases involve retirees or conservative investors who were placed into high-risk or illiquid investments inconsistent with their financial goals.
How the FINRA Arbitration Process Works
- A FINRA arbitration begins with the filing of a Statement of Claim, which explains the facts, identifies the responsible brokerage firm or advisor, and specifies the damages sought. The firm must file a written response, known as an Answer, addressing the allegations.
- The parties then engage in discovery, exchanging relevant documents such as account statements, trade confirmations, suitability materials, and internal firm records. Arbitrators are selected from FINRA’s roster, and hearings may take place in person, by video conference, or in a hybrid format.
- After the hearing, the arbitrators issue a binding award. FINRA arbitration awards are enforceable and typically issued within a defined time after the hearing concludes.
FINRA Arbitration Is Not Informal
- Investors are often told that arbitration is quick or casual. In reality, FINRA arbitration is adversarial and heavily defended. Brokerage firms argue that losses were caused by market conditions, investor decisions, or disclosed risks.
- A skilled FINRA arbitration lawyer understands how to rebut these defenses using suitability standards, supervision failures, and documentary evidence. Clear presentation, credibility, and knowledge of FINRA rules often determine outcomes.
FINRA Rules and Investor Protection
- FINRA arbitrators rely heavily on FINRA rules and industry standards, including suitability obligations, supervision requirements, disclosure duties, and standards of commercial honor. Violations of these rules form the backbone of many successful investor claims.
- Understanding how arbitrators evaluate these obligations—and how firms attempt to justify misconduct—is essential to effective advocacy.
FINRA Mediation as a Resolution Option
- FINRA also offers mediation, a voluntary and confidential settlement process that can occur before or during arbitration. Mediation allows parties to explore resolution without a binding decision. While not required, mediation can be effective when claims are well-supported and clearly presented.
Time Limits for FINRA Arbitration Claims
- FINRA imposes a six-year eligibility rule, meaning claims generally must be filed within six years of the events giving rise to the dispute. Additional state statutes of limitation may apply. Missing these deadlines can permanently bar recovery.
- Early consultation with a FINRA arbitration attorney can help preserve claims and evidence.
Representing Investors Nationwide
- With offices in New York and California, MDF Law represents investors across the United States in FINRA arbitration proceedings. The firm focuses exclusively on plaintiff-side representation for investors harmed by broker misconduct, unsuitable investments, and supervision failures.
- FINRA arbitration is often the only path to recovery. Experienced representation can make a meaningful difference in outcome.
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Contact
- New York Office 28 Liberty Street New York, New York 10005
- California Office 1902 Wright Place, Suite 200 Carlsbad, CA 92008
- 800-767-8040