It is completely understandable to be very protective of the money that you worked hard, day in and day out, to earn. In fact, your nest egg is the culmination of years of focus, discipline, and time spent in your life’s work. Your nest egg is something to be very proud of. It is the thing that helps your kids get through college and will be there for you in your sunset years.

That is why coming across an unscrupulous investment professional or financial advisor is so emotionally, as well as financially, hurtful. It is hard to find out that the person or brokerage company in which you trusted your hard-earned savings is improperly using that which is rightfully yours. 

Therefore, if you find evidence that your financial advisor is unfairly taking your money, then you need to take action. Of course, investing your money always has risks. But if you have a legitimate concern that your financial advisor is abusing his or her trust in administering your finances, then you need to consider a FINRA arbitration or FINRA mediation.  

Then the important question becomes: Do you need an attorney to represent you in the FINRA arbitration or FINRA mediation? The answer is that you do not need an attorney, but you will definitely want one once you realize the stakes. 

This article will discuss those stakes with you. We will first talk about some securities arbitration fundamentals, and then we can consider whether it is a good idea to hire a securities attorney. Of course, if you have additional questions about your own circumstances after reading this article, we welcome you to contact us today on our online contact form, or by calling 888-768-2499. We are the investment fraud lawyers who can help you.   

The Fundamentals of Securities Arbitration

First and foremost, FINRA stands for the Financial Industry Regulatory Authority. It is a government-authorized, not-for-profit organization that regulates financial broker-dealers in the United States. The mission of FINRA is to:

1. Provide investors with basic protections;
2. Ensure that securities sellers are tested, qualified, and licensed;
3. See that securities advertisements are truthful and not misleading; and
4. Make sure that securities products sold to an investor are suitable for that investor.  

FINRA is a regulatory body that protects the investing public through investigations and enforcement actions. It also provides an exclusive forum for resolving disputes between investors and their brokers. If you have opened a brokerage account at a FINRA member firm ( which is basically all major brokerage firms)–you have agreed to have FINRA be the sole forum to file any claims you have regarding your brokerage account.

Now, you have likely heard the terms “arbitration” and “mediation” before. They are essentially less formal ways in which to resolve disputes, in which a court of law is not involved. Specifically, with regard to securities disputes, FINRA provides the forum for those arbitrations and mediations.  

While less formal, arbitration is very similar to a court proceeding. Yet, the difference is in the fact that arbitrations do not generally have depositions, are concluded more quickly, and are generally cheaper and less complex than litigation in court. Unlike court proceedings which are public, FINRA arbitrations are also confidential.

What typically happens in the arbitration is that both parties select a neutral arbitrator, or arbitrators, from a FINRA list. The arbitrator will then hear arguments from both sides, will consider testimony and evidence from both sides, and render a binding award. 

If the claim involves more than $100,000, then there will be an in-person hearing with a panel of three arbitrators. If the claim is less than $50,000, then there is usually a single arbitrator. A hearing by phone conference, or simply on the documents, can be held. Generally, arbitration awards are final and not appealable.

Should You Get an Attorney for a FINRA Arbitration?

FINRA’s rules provide that parties are entitled to have attorney representation. You should be aware that if you are challenging a financial advisor or brokerage organization, they will most likely have an attorney on their side.  

That said, here is some consideration you can keep in mind when you are deciding whether to go with a securities attorney.

1. Unfamiliar Process. Even though arbitration is not a court, there are a number of rules and procedures that might be overwhelming for someone unfamiliar with the processes.  

2. Complex Case? Arbitrations can be relatively straightforward. But, there are some complicated issues that might arise. In those cases, having an experienced securities attorney could be invaluable.

3. Case Assessment. If you are an aggrieved party, you might have difficulty separating yourself emotionally from the matter. If that is the case, then you may have difficulty being able to realistically assess whether you have a viable claim. Consulting with an experienced attorney will help you realistically assess whether your grievance is worth going through the trouble of a FINRA arbitration.  

4. Arbitrator Evaluation. As noted, an arbitration begins with the parties selecting someone from FINRA’s list of arbitrators. A seasoned attorney who has handled a number of FINRA arbitrations would be able to easily rate which arbitrator is worth selecting.

5. Discovery of documents. The average investor is likely unfamiliar with the inner workings of a brokerage firm and in not aware of the significant internal documents which may help establish or prove his or her claims. A FINRA arbitration attorney is well versed in this area and knows what documents to ask for in discovery to help establish the wrongdoing or fraud.

Protect Your Nest Egg – Get a Securities Attorney to Help You with Your Investor Fraud Claim

If you or a loved one has been the victim of investment fraud, then you need an experienced, aggressive securities fraud attorney to zealously pursue your case against the perpetrators. We invite you to contact securities attorney Melanie Cherdack.    

Because she has been in the trenches as a former Wall Street attorney, Melanie Cherdack and her team of experienced attorneys have seen just about every type of investment fraud or investment loss. While almost every investment carries a degree of uncertainty and risk, you may have been unnecessarily exposed to such risk due to the actions of others.  

If you have lost money due to investment fraud or simple broker negligence, it is crucial to hire a lawyer who fully understands this area of law. Former Wall Street securities attorney Melanie S. Cherdack represents individual and institutional investors who are unwitting victims of investment fraud and broker negligence. She heads up a group of attorneys who represent investors across the United States. Contact us by filling out our online contact form, or calling 888-768-2499.