Dispute Resolution

Related Links:
FINRA Resources for Mediation and Arbitration
provides helpful information about the arbitration process

Most securities agreements include an arbitration clause. This clause requires arbitration regarding disputes that arise from investment practices.

About Arbitration

Arbitration is a method for resolving a dispute. Arbitration is moderated by private, impartial parties who have a particular knowledge of the subject matter. The arbitration process for securities disputes is streamlined for investment matters only. In addition, only individuals with a highly specialized background in finance moderate the process. This avoids unnecessary and expensive litigation in the courts and helps to facilitate a better outcome for the parties.

Representation by a Lawyer

Investors are entitled to representation by a lawyer in the arbitration process. Arbitration is a complex legal process. It is important that you retain experienced counsel.

The Process

The process begins when one party files a complaint, usually through a lawyer. The opposing party has an opportunity to respond and, if appropriate, the matter is set for a hearing before an arbitrator. Your lawyer will be able to challenge the appointment of an arbitrator and request an alternate one. Thus, the lawyer’s experience with various arbitrators and their tendencies may be invaluable to a favorable disposition of the case.

The Arbitration Hearing

The arbitration process has some similarities to court proceedings. There is an exchange of pleadings and requests for information. After preparation, there is a hearing before the arbitration panel, which will eventually render a decision. This decision has the binding effect of a court order.