Securities Arbitration

Do you believe your investment portfolio was mismanaged? Did you lose money because a stock broker or financial adviser gave you false and misleading information or committed investor fraud?

At the Boliver Law Firm, our lawyers place great emphasis on providing knowledgeable and dedicated advocacy to investors whose financial advisors betrayed their trust. We have a deep understanding of the complexities of securities law, and we use this knowledge to help clients obtain the best possible results. While this may require going to court, we often can save clients time and cost by resolving securities fraud cases through alternative forms of dispute resolution, such as FINRA arbitrations.

Securities arbitration is a form of alternative dispute resolution. Instead of your case being heard by a judge or jury in court, it is heard by a panel of one to three neutral arbitrators. The arbitrators will hear all the evidence and render a decision.

In 1987, in Shearson v. McMahon, the U.S. Supreme Court held that agreements to submit securities disputes to arbitration were enforceable under the Federal Arbitration Act. Today, disputes between consumers and broker-dealers are largely resolved in arbitration rather than in courts. Arbitration for these disputes is overseen by a self-regulatory organization, such as the Financial Industry Regulatory Authority (FINRA).

A securities arbitration attorney at the Boliver Law Firm in Iowa, Nebraska, Arizona and other states can review your situation and explain arbitration procedures to you.

The Financial Industry Regulatory Authority and other self-regulatory organizations have rules requiring that agreements between customers and broker-dealers that include arbitration clauses:

• The customer is waving the right to seek remedies in court
• Arbitration is final
• Discovery is more limited than in court proceedings
• The award is not required to include factual findings and legal reasoning
• The arbitration panel will include a minority of arbitrators who are associated with the securities industry

This disclosure must be in distinguishable type and in outline form so it is clear to the reader. Before the signature line, there must be a highlighted statement that the agreement contains a pre-dispute arbitration clause. A copy of the agreement must be given to the customer, who must acknowledge receipt of it.

Financial Industry Regulatory Authority was created by consolidating the National Association of Securities Dealers (NASD) and the New York Stock Exchange’s member regulation, enforcement and arbitration operations. The consolidation became effective on July 30, 2007.

The FINRA is dedicated to protecting investors and the integrity of the market. The organization provides information and education for investors. It also provides trade reporting.

The Financial Regulatory Authority conducts regulatory oversight of more than 5000 securities firms and 666,000 registered representatives. The organization is in charge of rule writing, enforcement of those rules and the securities laws, firm examination, and arbitration and mediation. It oversees the arbitration between customers and member firms in cases involving securities claims, such as unauthorized trading, churning, failure to supervise, breach of fiduciary duty, misrepresentation and broker negligence. The FINRA also provides arbitration services in cases between associated persons employed by member firms and their employers and between member firms.

In addition, FINRA handles all tasks that were previously the responsibility of NASD, including market regulation under contract for NASDAQ, the American Stock Exchange, the International Securities Exchange and the Chicago Climate Exchange.

FINRA arbitration is governed by the Code of Arbitration Procedure (the “Code”). The Code was recently revised to include additional rules and better organization. The Revised Code details discovery procedures for customer and member firm disputes and discovery sanctions. Under the Revised Code, the parties must comply with “Document Production Lists” from the organization’s Discovery Guide, which identify documents that are presumed to be discoverable for certain claims. The Revised Code also modifies the exchange of documents the parties must undertake 20 days before the hearing. In this “Twenty-Day Exchange,” the parties must produce documents they intend to use at the hearing that have not been produced yet and identify all witnesses. The Revised Code also contains provisions related to amended pleadings and selecting arbitrators.