AWARDS AND DECISIONS THROUGH FINRA BY BRADFORD RICHDALE

Award and Decision – The decision is made after all of the parties complete their presentations and the arbitrators close the record. Arbitrators will attempt to make a final decision within 30 days after they close the record and are not required to write opinions or provide reasons for their decision. You may request an opinion from the arbitrator, but make sure that request is in writing before the hearing date. The arbitrator takes all of the information into consideration and makes a decision. An award is written to summarize the hearing and gives the decision and all parties are notified at the same time. The award will also include the arbitrator’s reasons for the decision.

If you win the award, expect to be paid within 30 days from when the parties were notified of the decision. The other party will pay you directly, usually by sending you a check in the amount specified by the arbitrator. Brokers and FINRA member firms must pay arbitration awards within 30 days of receipt, unless a motion to vacate is filed in court.

Remember that it is your responsibility to prepare yourself for the arbitration hearing. Arrange for any witnesses and/or evidence to be available for presentation at the time of the hearing. You must inform the other party of the witnesses you have and provide copies of anything you plan to use at the hearing as evidence at least 20 calendar days before the start of the hearing. You will also need to bring enough copies of each item for each arbitrator and one for FINRA.

It is important to be well organized and have outlined and practiced what you want to say. Arbitrators appreciate cases that are concise and well focused and free from repetitive and irrelevant information.

Most arbitration cases end with a settlement between the parties either through direct negotiation or through mediation. In recent years, parties agreed on a resolution in about 60 percent of all cases. Other cases are withdrawn or closed before the process begins.

What happens if your brokerage firm goes out of business or you win arbitration and you don’t get paid? Brokers must pay arbitration awards within 30 days of receipt, unless they file in court a motion to vacate. Interest is due from the date of the award, if the broker doesn’t pay the reward within the 30 day period or the broker files a motion to vacate the award and the motion is denied.

If needed, the arbitrators can decide on another type of paying interest. For instance, the arbitrators can say that the interest is due from an earlier or later date. The interest is the legal rate in the state in which the award was made, unless the arbitrators set a different rate.

If you haven’t been paid within 30 days of receipt of the award, you should notify the State Revenue Office (SRO) that issued the award. Under the Constitution, Rules, and Bylaws of the SROs, the membership or registration of an organization can be suspended or canceled if the company does not comply with an arbitration award, unless the member has made a timely motion to vacate or modify the award. Check with your SRO for its specific practices and standards.

Federal and state laws also enforce arbitration awards. For instance, under the Federal Arbitration Act, a party has one year from when the award was issued to confirm the award. The arbitration award is turned into a court judgment that can be forced like any other judgment. 

                                      copyright Brad Richdale TM 2010 all rights reserved
                                                  blog by Bradford Richdale

Navigating Through a FINRA Claims for Money Losses On Stocks Part By Brad Richdale

unethical activity. The Office of the Whistleblower was established to expedite the review of high-risk tips by FINRA senior staff to ensure a rapid response for information believed to have merit.

Investors may also file their complaints with the appropriate regulatory authorities, such as the Securities and Exchange Commission (SEC), state securities commissions, or one of the self-regulatory organizations (SROs) listed in the SRO Directory. The regulator may then investigate the complaint and, if warranted, can censure, fine, or suspend that organization. However, the investigation most likely will not recover the investor’s losses.

The process of arbitration differs among cases. Here are the main, but not complete, steps of arbitration.

Initiating the Arbitration – A request is made by one party for a dispute to be settled through arbitration.

Appointment of the Arbitrator – Arbitrators may be appointed by one of three ways: directly by the disputing parties, by existing tribunal members, or by an external party.

Conduct a Preliminary Meeting – It is beneficial to have a meeting between the arbitrator and the parties, and their legal council to look over the case in question and discuss an appropriate process and timetable.

Statement of Claim and Response – The claimant sets out a summary of the matters in dispute in their own words and the reasoning and remedy sought in the decision. This is needed to inform the respondent of what questions needs to be answered. It summarizes the alleged facts, but does not include the evidence through which facts are to be proved. The statement of response from the respondent – the broker or firm with whom you have the dispute with – is to admit or deny the claims.

The respondents will use the Statement of Claim to prepare their case and be prepared to prove each of your statements. There may also be a counterclaim by the respondent, which in turn requires a reply from you, the claimant. These statements are called the “pleadings.” Their purpose is to identify the issues and avoid surprises. Remember to include all of the information because most of the brokerage firms have large legal departments and legal firms to argue that your case is false.

The Submission Agreement will also need to be filed and states that you have selected arbitration as the means to solve the dispute and that arbitration cannot begin without it. The agreement also says that you are bound by the decision made by the arbitrators.

Discovery and Inspection Procedures – These are legal procedures where the parties investigate background information. The discover procedure is when each party must provide all of the relevant documents to plead their case. Parties then “inspect” the discovered documents and a selection of documents is given to the arbitrator. The written evidence is distributed among both parties and is then given to the arbitrator to review before the hearing. Keep in mind that the respondent may also file a claim against a third party, or file a counter claim against you.

If your claim is for $25,000 or less, it is considered a “small claim” and in most cases, a single public arbitrator will render a decision by reviewing the written statements and other materials submitted by each party. However, you may request an in-person hearing where you offer a live testimony instead of having the arbitrator render a decision based on the written submissions of the parties.

In cases where the claim is more than $25,000 or if you request an in-person hearing, the hearing will be scheduled as soon as possible. Hearings are conducted in sessions of up to four hours, usually with two sessions per day, though not necessarily on consecutive days.

Arbitration Hearing – The arbitrator listens to any oral statements, questioning of witnesses and can ask for clarification of any of the provided information. Both parties are allowed to put forward their case and be present while the other side states their information. You will be able to object to any evidence presented by the other party before the arbitrators review the evidence. A hearing can be avoided if the issues can be resolved entirely from the documents.

Legal Submissions – The lawyers of both parties give the arbitrator a summary of their evidence and information on applicable laws. These submissions are made either orally at the hearing, or put in writing once the hearing is complete.


                                                    written by Bradford Richdale
                                          copyright Brad Richdale TM 2010 all rights reserved
                                          story also found at Brad Richdale Customer Reviews