What is Securities Arbitration?

If you have suffered investment losses as a result of your broker’s investment recommendations, then you may have a claim to recover those losses through Securities Arbitration. Galvin Legal, PLLC can help investors recover investment losses anywhere across the nation.

Securities Arbitration is a way of resolving securities and employment disputes between and among investors, brokerage firms, and individual brokers, and offers a prompt and inexpensive way of resolving issues. Investors can file a Securities Arbitration claim through FINRA when they have a dispute involving the business activities of a brokerage firm or one if its brokers.

If you want to recover damages, such as money or securities, filing a Securities Arbitration case offers you a way to seek damages.

Securities Arbitration is similar to going to court, but is usually faster, cheaper, and less complex than litigation. It is a formal alternative to litigation in which two or more parties select a neutral third party, called an arbitrator, to resolve a dispute. The arbitrator’s decision, called an award, is final and binding. By arbitrating a claim you cannot have the same matter decided by a court of law. In resolving disputes through Securities Arbitration, a FINRA arbitrator or panel (consisting of three arbitrators) will listen to the arguments set forth by the parties, study the testimonial and/or documentary evidence, and then render a decision. When a Securities Arbitration case goes to a hearing, it can take up to 16 months for an award to be determined.

The size of the claim will determine how the Securities Arbitration process works. Claims involving more than $100,000 require an in-person hearing decided by a panel of three arbitrators, with one chairing the hearing. Smaller claims are decided by one arbitrator and the smallest—claims of up to $50,000—may be decided through a Simplified Arbitration Process, with the arbitrator deciding the case by reviewing all the materials presented by the parties without an in-person hearing.

Learn more about FINRA’s Securities Arbitration process, including which cases are eligible.

The following are some of the typical types of claims that are brought.

• Suitability – Unsuitable Investments
• Investment Fraud – Misrepresentation
• Unauthorized Trading
• Diversification
• Churning
• Excessive Use of Margin
• Selling Away

See the Resources section for information on Common Investment Types.