FINRA Arbitrations and Dispute Resolution

The Castle Law Firm has extensive knowledge of the financial service industry’s laws, rules, and regulations that impact its clients, including the forums in which disputes are adjudicated. Rob Castle is a registered FINRA arbitrator and is trained to see disputes from all angles. He will work with opposing counsel to reach the most favorable outcome for your case, and if necessary, take the dispute to the appropriate forum. He has experience representing financial services entities of all shapes and sizes, as well as their representatives and employees in state and federal court, and in arbitrations before FINRA, the Chicago Board Options Exchange (CBOE), JAMS, the American Arbitration Association (AAA), and other SROs.

The arbitration and dispute resolution matters we typically handle include representing both financial services entities, and their financial professionals, in:

Investor claims relating to:

• Unsuitability (e.g. recommendations to purchase or sell a security that is unsuitable given the customer’s age, financial situation, investment objective, or investment experience)
• Churning (e.g. excessing trading or conducting trades in excess of the investor’s goals to generate commissions or fees)
• Fraud and Misrepresentation (e.g. providing misleading information or failing to disclose pertinent facts about an investment—like risk, fees, company financial information, or bond ratings)
• Failure to supervise (e.g. over compliance with securities laws, regulations, and FINRA rules)
• Breach of Fiduciary Duties
• Theft

Employment claims relating to:

• Breach of contract
• Form U4/U5 defamation
• Wrongful termination
• Bonus Disputes
• Defamation
• Discrimination

What is FINRA Arbitration?

A FINRA arbitration is a contractually mandated procedure for resolving securities disputes between two or more parties who agree to abide by the arbitrators’ decisions. It is a formal binding dispute resolution process guided by the Code of Arbitration Procedure for Customer Disputes and Code of Arbitration Procedure for Industry Disputes (referred to together as “the Codes”). Arbitrators hear all sides of a dispute, study the facts and evidence, and make decisions and arbitration awards. Arbitration awards are final and legally binding, with no appeal process within FINRA. They may be reviewed by a court in only limited circumstances.

Overview of FINRA Arbitration Process for Most Arbitrations

1. The claimant files a statement of claim detailing relevant facts and the remedies requested
2. The party named in the claim, or the respondent, responds by filing an answer with relevant facts and defenses to the claim
3. FINRA provides the parties lists of potential arbitrators to select the panel and hear their case
4. The arbitrators and parties hold a prehearing conference by telephone to schedule hearing dates and resolve preliminary issues
5. Discovery occurs, where parties exchange documents and information with one another to prepare for a hearing
6. A hearing occurs, where parties and arbitrators meet in person (and sometimes telephonically), along with any representatives and witnesses, to present arguments and evidence
7. After the final hearing, arbitrators consider the facts of the case and issue a written decision called an award

*Most arbitrations follow this process, but there are some special types of arbitration

• For example, in limited circumstances, a different process is followed—such as in a simplified arbitration. In a simplified arbitration, parties involved in a claim of $50,000 or less have their dispute resolved by a single arbitrator, who decides the outcome based on materials submitted by the parties.