FINRA Arbitration Primer - Part 1 of 8
This is the first of an eight-part blog series that will provide investors with information about the FINRA arbitration process. Please come back to our blog periodically to follow this series.
Investors who have disputes over a stockbroker’s or brokerage firm’s misconduct generally must pursue their claims through binding arbitration with the Financial Industry Regulatory Authority (FINRA). That is, investors usually are not permitted to go to court to seek compensation for their damages, rather they must resort to FINRA’s private arbitration process. These claims would include complaints that a stockbroker made unauthorized trades, recommended unsuitable investments, made excessive trades, stole money from a client, or misrepresented the risks of an investment. The claims also could include complaints that a brokerage firm negligently supervised a broker or sold a fraudulent investment.
Why FINRA Arbitration?
In 1987, the U.S. Supreme Court decided Shearson/American Express v. McMahon, which held that broker-dealers can enforce arbitration clauses in contracts when a customer brings a dispute over securities transactions. Since then, virtually all securities brokerage firms include mandatory arbitration clauses in their customer agreements, requiring all disputes to be filed wiht FINRA’s arbitration forum.
Contact Us Today
Dimond Kaplan & Rothstein’s lawyers have extensive experience representing individual and institutional investors in FINRA arbitration proceedings throughout the United States. With offices in Miami, Los Angeles, New York, and West Palm Beach, DKR has a nationwide FINRA arbitration practice. Contact a DKR FINRA arbitration lawyer for a free case evaluation if you believe you have lost money as a result of broker or brokerage firm misconduct.