Litigation Process


FINRA Arbitration Process

Virtually all agreements between investors and their financial advisors include mandatory arbitration agreements, whereby investors and the financial advisors, waive their right to trial in a court of law.

For clients with brokerage accounts at FINRA regulated firms, their arbitration agreements typically direct the claim to FINRA’s arbitration forum – FINRA Dispute Resolution. The arbitration process is outlined below:

Step 1

Initial Consultation and Evaluate Claim

The lawyer and client meet to discuss the underlying facts and potential claims. Client will produce relevant documents and agreement to lawyer who will evaluate the same in order to determine if there is a viable cause of action.

Step 2

File a Claim

A claimant initiates arbitration by filing a statement of claim that specifies the relevant facts and remedies requested.

Step 3

Answer a Claim

A respondent responds to an arbitration claim by filing an answer that specifies the relevant facts and available defenses to the statement of claim.

Step 4

Arbitrator Selection

Arbitrator selection is the process in which the parties receive lists of potential arbitrators and select the panel to hear their case.

Step 5

Prehearing Conferences

Prior to the hearing, the arbitrators and parties meet telephonically to schedule hearing dates and resolve preliminary issues.

Step 6


Discovery is the exchange of documents and information in preparation for the hearing.

Step 7


The parties and arbitrators meet in person to conduct the hearing in which the parties present arguments and evidence in support of their respective cases.

Step 8

Decision & Awards

After the conclusion of the hearing, the arbitrators deliberate the facts of the case and render a written decision called an award.

For clients with accounts held at Registered Investment Advisors, the Investment Advisory Agreement typically dictates which arbitration forum will adjudicate the dispute (i.e., American Arbitration Association, Judicial Arbitration and Mediation Service, National Arbitration and Mediation, etc.) The process is similar to FINRA arbitration, however, each forum typically has its own set of procedures.

For clients who do not have arbitration agreements, or for those who invested money with someone not regulated by FINRA or a Registered Investment Advisors, they can file suit in state or federal court (depend largely on the investments at issue, amounts in dispute and the location of the parties). The litigation process in state or federal court typically moves at a slower pace and involves added discovery obligations.

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*In some litigated matters, we advance costs and expenses related to the litigation. In these situations, the advanced costs and expenses are recovered from the gross recovery of any verdict or settlement.

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