In an investment fraud or stockbroker misconduct lawsuit, it is highly likely that the parties will have to participate in the mandatory stockbroker arbitration process. This process is required through the Financial Industry Regulatory Authority (FINRA). Because most brokerage firms have a wealth of high-powered lawyers on retainer for these types of situations, it is important for individuals to retain an experienced stockbroker fraud attorney to help you navigate the various documentation and hearings that are part of the arbitration process.
What are Mandatory Arbitration Provisions?
A mandatory arbitration provision is typically included in the documentation given to individuals interested in hiring a stockbroker. The provision specifically states that disputes between the individual and stockbroker must be arbitrated, as opposed to being handled in court. Until a problem arises with a stockbroker, or an investor learns of fraud or account mishandling, most people do not pay close attention to this clause. However, ignoring or dismissing the provision would be a huge mistake.
Most California stockbroker fraud attorneys will tell you that mandatory arbitration provisions are extremely important and must be addressed as soon as an issue arises. In general, investors do not have a choice to opt out of arbitration when they sign their paperwork, but they should be aware that the provision is part of the agreement. Such awareness can prove to be beneficial if a problem does arise because the investor will need to take certain steps to begin the process.
The Arbitration Process
To initiate stockbroker arbitration proceedings, you and your California stockbroker fraud attorney will need to file the necessary documentation with FINRA—namely a Statement of Claim and a Uniform Submission Agreement. These forms need to be completed accurately, and they often have fees associated with them. Once all forms have been properly filled out, all parties named in the Statement of Claim—typically the investor and the stockbroker involved—will receive notice of the claim and will have 45 days to respond.
If the claim goes to arbitration, it will be presented to an arbitration panel. The panel can consist of up to three individuals, who will hear testimony from both sides and examine any evidence that is presented. The mandatory arbitration process relies on the rules, procedures and regulations set forth by FINRA for securities management and transactions. In an arbitration case, the panel will comb through your stockbroker’s work, and analyze the transactions or events you believe to be mishandled or fraudulent. The panel’s decision—which is called an award—is binding and cannot be changed or overturned. It is very rare that a stockbroker arbitration award is challenged, and the situations in which this can be done are few.
At the Evans Law Firm, our California stockbroker fraud attorneys represent clients who have been cheated or tricked by the people with whom they placed their financial trust. Security in your stock and your wealth is important to our clients, and we make fighting stockbroker fraud a top priority. To discuss your case with one of our attorneys, contact the Evans Law Firm at 415.441.8669 today.
