{"id":352689,"date":"2017-05-09T18:43:11","date_gmt":"2017-05-09T23:43:11","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/consumer\/securities-law\/finra-arbitration-process-and-timeline.html"},"modified":"2024-05-06T18:39:28","modified_gmt":"2024-05-06T23:39:28","slug":"finra-arbitration-process-and-timeline","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/consumer\/securities-law\/finra-arbitration-process-and-timeline.html","title":{"rendered":"The FINRA Arbitration Process"},"content":{"rendered":"\n
\n \n
\n

The FINRA Arbitration Process<\/h1>\n
\n
\n By Oni Harton, J.D.<\/a> | Legally reviewed by Melissa Bender, Esq.<\/a>\n | Last reviewed\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
\n

This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
\n

The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

In a perfect world, all your investments would increase in value over time. Everyone in the financial industry would have your best interest in mind. You could trust brokerage firms, stockbrokers, and financial advisors to follow the rules. Unfortunately, we don’t live in a perfect world.<\/p>\r\n

Participants in the securities industry need protection. Investors and securities industry<\/a> professionals rely on the guidance and oversight of regulatory organizations like the Financial Industry Regulatory Authority (FINRA). FINRA has several tools to resolve disputes and hold industry professionals accountable.<\/p>\r\n

This article discusses the FINRA arbitration process for resolving disputes. It explains the timeline for arbitration cases and other procedures related to FINRA arbitration proceedings.<\/p>\r\n

What Is FINRA?<\/h2>\r\n

FINRA, or the Financial Industry Regulatory Authority<\/a>, is a non-governmental, not-for-profit organization. FINRA works under Security and Exchange Commission (SEC) supervision. It seeks to safeguard the integrity of the securities markets by serving as the first line of oversight in the brokerage industry.<\/p>\r\n

Congress authorized FINRA to write and enforce broker-dealer rules that strengthen investor safeguards. It protects investors by facilitating a fair and ethical broker-dealer industry<\/a>. FINRA also provides mechanisms for resolving disputes and disciplining violators.<\/p>\r\n

Arbitration and mediation are two forms of dispute resolution<\/a>. Parties often pursue one of these dispute resolution processes to avoid costly and time-consuming litigation. Arbitration is an efficient, cost-effective means to resolve a legal dispute.<\/p>\r\n

It’s usually more efficient to pursue alternative dispute resolution procedures. Litigation can involve the time-consuming and costly discovery process, including depositions and document production.<\/p>\r\n

FINRA Dispute Resolution Services offers arbitration and mediation. FINRA mediation<\/a> involves parties negotiating a mutually agreeable solution. A third-party mediator conducts the mediation.<\/p>\r\n

What Is FINRA Arbitration?<\/h2>\r\n

When FINRA constituents have a securities dispute involving a brokerage firm or one of its brokers and they seek monetary relief, FINRA Dispute Resolution Services can help. A party can file an arbitration claim or request mediation. The FINRA arbitration process is compulsory. FINRA members must answer claims.<\/p>\r\n

The arbitration<\/a> forum employs an impartial intermediary who listens to both sides’ arguments. In most cases, attorneys represent the parties.<\/p>\r\n

In many ways, an arbitration dispute resolution forum resembles court. For example, the process typically involves:<\/p>\r\n