Securities Litigation against Financial Planners

Unlike in other industries and surrounding other tort issues, lawsuits involving securities fraud and broker misconduct are generally not resolved through trial by jury, mostly due to the fact that brokerage firms require customers to sign away that right before engaging the services of the brokerage firm.

Instead, most securities industry lawsuits are arbitrated and mediated by FINRA, or the Financial Industry Regulatory Authority, the largest independent securities regulator of all securities firms in the US. FINRA’s mandate is “to protect investors by maintaining the fairness of the US capital markets.” They’re the industry watchdog, and in situations of dispute, they step in to mediate, arbitrate, award restitutions, and sanction or fine rogue brokers and firms.

FINRA Arbitration vs Mediation

FINRA Disputes can take one of two courses: arbitration or mediation.

Arbitration Arbitration involves a process by which the interested parties select a neutral, third-party to listen to arguments, review evidence, and ultimately arrive at a decision on the matter at hand. By arbitrating your claim, you forego the right to take the same claim to court, and decisions rendered by the arbitrator in a FINRA dispute are final and legally binding.

Mediation Mediation is different. In mediation, the same parties would submit to an informal, voluntary, non-binding process that is intended to help them reach a mutually acceptable resolution, and thus if possible, avoid arbitration or court. Here’s a more extensive side-by-side comparison chart provided by FINRA:

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Finding a Qualified FINRA Litigation Attorney

Investors who have been the victim of broker misconduct or securities fraud generally avail themselves of the services of a qualified attorney before entering a FINRA Dispute. Since FINRA Disputes are specialized proceedings, it’s best to find an attorney who has considerable experience in this particular practice area.

Philadelphia Securities Attorneys

If you or someone you know has been the victim of investment fraud or broker misconduct, please contact our securities attorneys immediately for a free consultation at 215-462-3330 or by using our online contact form.