How to File a FINRA Complaint Against a Brokerage Firm

18 March, 2024

If you have lost money because of broker misconduct, you are understandably shocked and angry. Your hard-earned money is gone because of the actions of someone who you trusted.

Your first instinct is to find some way to complain about the broker. You certainly have that option, and FINRA will review what you have to say, and they may even take action.

If you want your money back, however, the complaint process may not help you much. Instead, arbitration is your best path to financial compensation. Call the FINRA arbitration lawyers at Rikard & Protopapas to learn how we can help you file an arbitration claim against your broker.

How the FINRA Complaint Process Works

FINRA recommends that you contact your broker first to discuss the issue before you file a complaint. If you have not been able to reach a satisfactory resolution, you would then file a complaint.

FINRA has a page on its website that describes the complaint process and provides a link to a form that you would fill out and submit. The form is somewhat limited because it is just the introduction of the matter for FINRA. They are reviewing the facts that you provided to determine whether more investigation is necessary. In other words, it is just the first step of the process.

The FINRA form asks you to provide the following information:

  • The primary violation (which you would select from a drop-down menu)
  • The amount in dispute
  • The start and end date of the controversy (or whether it is ongoing)
  • Whether your issue is investment-related
  • A summary of the situation

FINRA will review all submissions. They may choose to launch an investigation, and then you would hear from FINRA. If the matter is outside of FINRA’s jurisdiction, they will forward it to the appropriate regulator.

When You May File a Complaint with FINRA

Below are some instances in which you may file a complaint against your broker:

  • Failure of the firm to supervise its brokers
  • Recommending unsuitable securities under any one of the three forms of suitability requirements
  • Churning (excessive trading in your account)
  • Misappropriation of customer funds
  • Failure to disclose material information about an investment
  • Excessive fees charged to you
  • Unauthorized transactions in your account

A FINRA Complaint Could Result in Action, but Not Financial Compensation

While FINRA may take action against the broker, that may not necessarily help you. What you are really after is getting as much of your money back as you can. Even if FINRA fined the broker, it may not help you at all.

Plus, FINRA receives many complaints each year, and they only investigate a small fraction.

The regulator has limited resources, and it cannot investigate everything. Even if your broker did something wrong, FINRA may still not take up your case.

Arbitration Claims Could Win You Financial Compensation

If you want compensation for what your broker did, your better choice is to file an arbitration claim. You would get a hearing in front of a panel of arbitrators who has the power to make a monetary award. Your broker may even try to settle your claim because they do not want to lose an arbitration case. The attorneys at Rikard & Protopapas can help you at every step of the way.

FINRA arbitration hearings are actually relatively rare. Most arbitration claims will reach a settlement agreement at some point before the actual hearing. The broker often realizes that you have a strong case, and they may make you a settlement offer. Alternatively, the two lawyers may agree to enter into mediation to resolve the dispute.

The broker may raise their settlement offer over the course of negotiations, and you could reach an agreement. Nonetheless, arbitration is your best chance to get your day in court in a way that could lead to compensation.

You may first want to talk to your broker about the situation before you go through the arbitration process. You could consider sending a letter to someone who is higher on the management chain to see if the broker will offer you a satisfactory resolution. Even though the broker will rarely give what you ask, it is worth at least trying to avoid the arbitration process if you can.

FINRA expects you to try to resolve the situation if you can, even though you have the right to arbitration.

You could always file a complaint with FINRA about the broker’s conduct, but it may only be enough for FINRA to take action against the broker in the form of a fine. If you actually want compensation for what your broker did wrong, you would need to file an arbitration claim.

How Rikard & Protopapas Can Help You in a Broker Misconduct Case

Rikard & Protopapas can file the arbitration claim on your behalf. We will vigorously represent you throughout the process.

We will continue to develop your case all the way up to a hearing in front of the arbitrators. If the broker wants to settle your claim, we will negotiate to obtain full and fair compensation for you.

While FINRA arbitration is a more informal process than the court system, it is still complex and specialized enough that you need an attorney for your case.

Contact a FINRA Arbitration Attorney Today

Rikard & Protopapas has the experience and skill to deliver the best possible result in your FINRA arbitration claim. When you need an attorney to stand firm on your behalf, contact us.

We will get to the bottom of your case and help you determine the best path forward.

Take the first step and schedule a free initial consultation. You can send us a message online, or you can call us today at (803)-805-7546. We can hold your broker accountable when they have wronged you and will not listen to you.



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