FINRA Arbitration Lawyer


When you have lost money due to your broker’s misconduct, one of your first thoughts is how you may get your money back. The only possible good news for you is that you have a legal right to take action, based on your agreement with the broker and FINRA rules.

You can file a claim against your broker that could lead to financial compensation. First, you need a FINRA arbitration law firm to represent you in the process. The experienced lawyers at Rikard & Protopapas can handle your case and help you pursue justice against your broker in a FINRA arbitration case.

You Must Arbitrate Against Your Broker, and Cannot Sue

When you have suffered losses at the hands of your stockbroker, you may not get your day in court the way that you would expect. You would have the ability to have your case heard — only it will not be in court in front of a state or federal judge.

Every brokerage agreement will contain a provision that forces you to arbitrate any claim that you have against your broker.

If you are wondering if that is legal, the United States Supreme Court has long upheld mandatory arbitration clauses in customer agreements. There may be certain situations where you can avoid a FINRA arbitration, but you need to consult with an experienced lawyer to know your rights.

How Arbitration Differs from Litigation

While arbitration may not be what you were hoping for, it is still a forum that is designed to hear your claim and potentially award you compensation if the arbitrator finds that the broker violated a rule. You will still have a court-like case, although one that may largely be dictated by the style and preferences of the individual arbitrator or arbitration panel.

There are many key differences between arbitration and litigation, including:

  • Arbitration is a much more informal and streamlined process.
  • You do not have a judge or a jury deciding your case.
  • Arbitration should be resolved more quickly than litigation.
  • You actually have a say in deciding who gets to hear and decide your case.
  • You do not get the right to appeal the arbitrator’s decision. FINRA does not have an appeals process through which a party may challenge an award. This means that FINRA does not hear appeals on arbitration awards. However, under federal and state laws, there are limited grounds where an appeal is allowed.

Common Types of FINRA Arbitration

FINRA has two main types of arbitration:

  • Disputes between customers and brokers
  • Intra-industry disputes

The most common types of cases that FINRA hears include:

  • Breach of fiduciary duty
  • Broker negligence
  • Failure to supervise registered representatives
  • Breach of contract
  • Misrepresentation
  • Recommending unsuitable securities
  • Omission of material facts about securities
  • Broker fraud

FINRA has an extensive set of rules that govern arbitration. These procedures are found in the 12000 series of the FINRA rules.

Although there are many FINRA rules, much also depends on the individual arbitrator, since the process is more informal and flexible. The arbitrator has a great deal of discretion in how they will conduct and hear your case.

Who Are the FINRA Arbitrators Hearing and Deciding Your Case?

First, you should be aware of who is hearing and deciding your case.

FINRA maintains an extensive list of arbitrators. The arbitrators are not necessarily people with extensive securities industry experience. FINRA arbitrators are not even employees of FINRA.

Instead, they are independent contractors who are paid on a daily basis for their work. Some may not even be lawyers.

The arbitrators have been approved by FINRA, and they are added to the roster after completing a training course. Some have built expertise over time after presiding over many cases.

How the FINRA Arbitration Process Works

Below are the relevant steps in the FINRA arbitration process:

Statement of Claim

You begin the FINRA arbitration process by filing a Statement of Claim, which sets forth the:

  1. Parties involved,
  2. Basis of your claim, and;
  3. Amount that you are seeking in arbitration.

FINRA requires that you pay a $400 filing fee with your arbitration claim.

The broker has 45 days to file their own answer to your allegations, which is often a denial. Your broker may also assert defenses to your claim, and they could even file a counterclaim against you.

Arbitrator selection

Both parties would select the arbitrators for your case. You have the ability to participate in the selection of the arbitrators.

However, your broker will also have the same right. You cannot expect them to propose an arbitrator with a track record of making large awards.

Therefore, it is vital that you have an attorney who has specific experience with the FINRA arbitration process and a knowledge of the potential universe of arbitrators.

According to FINRA, there are almost 8,000 arbitrators on their roster. FINRA will randomly generate a smaller pool of arbitrators for your case from whom you may choose. It is up to your lawyer to screen the available options. You will be able to see the arbitrator’s history and how they have decided cases. Otherwise, you could be stuck with an arbitrator who may be more sympathetic to your broker or may not make a large award.

The number of arbitrators depends on the amount of your claim. If your claim is for $100,000 or less, there will be one arbitrator. If your claim exceeds that amount, there will be three arbitrators — unless the two parties agree in writing to one arbitrator.

The arbitrator will hold prehearing conferences over the phone as your case moves forward. These conferences could address procedural matters, or they may address key parts in your case. Again, these conferences are at the arbitrator’s discretion.


The parties will conduct discovery, in which they have the legal right to request evidence that is in the hands of the other party.

Discovery is one area where arbitration is more streamlined than a formal court case. Chances are that the discovery you are afforded will not be as extensive as the process would be in court.

You will be able to request information from your broker. However, depositions are “strongly discouraged” in the FINRA arbitration process. Nonetheless, you may still be able to build a strong case that could persuade the arbitrator that you are entitled to compensation.


Like any legal proceeding, the two parties will often try to negotiate a settlement before the case proceeds to a hearing or a decision. You can engage the help of a mediator to facilitate a possible agreement. FINRA also has a mediation process, which operates independently of its arbitration process.

If there is no settlement agreement reached, your case will proceed to a hearing in front of the arbitrator(s). You will have the ability to call witnesses and present your own evidence for the arbitrators’ consideration.


The arbitrator or arbitrators will usually issue a ruling within 30 days after the hearing in your case. They may write a decision explaining the reason for their decision, although they are not always bound to do so. The arbitrator’s decision is almost the end of your case. If you have won, the broker would need to pay you in accordance with the amount that the arbitrator has awarded you.

Arbitration Results Cannot Be Appealed

Usually, the result of the FINRA arbitration is binding, and neither party can appeal it. FINRA does not have an appeals process. There are very few exceptions to this rule in state and federal courts.

Some of the reasons why you may be able to appeal a ruling are:

  • The arbitrators exceeded their powers
  • The arbitrator’s decision was completely irrational
  • The arbitrators manifestly disregarded the law

You should not expect to have the ability to appeal. Thus, you must make your strongest case to the arbitrator, and our attorneys can do that on your behalf.

Damages in a FINRA Arbitration Case

If you win your case, the arbitrator will award you damages. Usually, you would receive the amount that you have lost because of the broker’s misconduct.

However, the arbitrator reserves the right to make additional awards, including:

  • The money that you would have made had your account been properly managed
  • Interest on the award
  • Attorney’s fees that you had to pay to pursue your claim

The arbitrator also has the authority to award punitive damages in your case based on the extent of your broker’s misconduct. Punitive damages are rare, and they are reserved for some of the most egregious cases. However, they are a possibility.

Why You Need a Lawyer for a FINRA Arbitration

While you will have your case heard, success is far from guaranteed in your FINRA arbitration. FINRA statistics show that customers receive money after contested hearings between 30-45% of the time. However, the odds are far from stacked against you.

Only 20% of FINRA arbitration cases will actually end up in a hearing. Most cases are settled before the arbitrator holds a hearing.

The broker will not settle your claim immediately, at first, for a fair amount. Before you reach that point, you will need to develop a solid case that would convince the broker that they would not fare well at arbitration.

Your experienced FINRA lawyer would do the following to help you achieve a successful result:

  • Investigate your case and begin to develop the record that evidences your claim
  • Draft the Statement of Claim that would begin the arbitration process
  • Draft motions for the arbitrator to consider as the case proceeds
  • Conduct discovery on your behalf, where you would gather additional evidence
  • Work with expert witnesses to identify and prove your damages

Perhaps most important, the lawyer would negotiate a settlement on your behalf. The broker may offer a fraction of what you deserve at first. Over time (and perhaps with the assistance of a mediator), the broker may raise their settlement offer to something more realistic.

It is safe to say that the broker will not take you nearly as seriously on your own as they would when you have an experienced attorney representing you in the arbitration process.

Why Hire Rikard & Protopapas for Your FINRA Arbitration Case?

No one wants to be in a situation where you have to hire an attorney to pursue a broker for investment losses. Unfortunately, that is just something that many investors will be faced with when they have suffered losses that should not have occurred. When you find yourself needing a lawyer, you should hire one who has experience and a track record in FINRA arbitration.

These cases require a lawyer who has a detailed knowledge of securities laws and FINRA rules. Rikard & Protopapas understand the process and the specialized and unique rules that apply to FINRA arbitration.

Contact a FINRA Arbitration Lawyer Today

If you believe that your broker’s misconduct has cost you money, contact the attorneys at Rikard & Protopapas to take legal action. The first step is to speak with us in a free initial consultation, where we will learn more about your case and explain your options.

Then, we can help you take aggressive legal action to recover what you lost and hold the broker accountable for what they did. You can speak to a lawyer by calling us today at (803)-805-7546 or by sending us a message online. You do not owe us money unless we recover for you.



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