Decision & Awards

Arbitrators' Decision

After closing the record, the arbitration panel considers all of the evidence, deliberates together, and decides what relief the claimant is entitled to, if any.

 

In a three-arbitrator panel, an award is based on the vote of a majority of the arbitrators; a unanimous decision is not required.

 

Customer Code Rules 12608, 12904
Industry Code Rules 13608, 13904

 

Arbitration Award

Awards must be in writing, but arbitrators are not required to write opinions or provide explanations or reasons for their decision. The panel will issue an award within 30 business days from the date the record is closed.

 

 All awards rendered under the Codes are final and are not subject to review or appeal, except under limited circumstances. For exceptions to this rule, view "Challenges to an Arbitration Award."

 

In an award, the panel will decide whether to assess any costs and forum fees against any party, and how to allocate those costs and fees among the parties.

 

Once the award is signed by a majority of the arbitrators, FINRA will send copies of the signed award to each party or representative of the party.  FINRA makes all arbitration awards publicly available for free by posting them on Arbitration Awards Online.

 

An award will contain the following information:

 

  • Names of the parties;
  • Names of the parties' representatives, if any;
  • An acknowledgement by the arbitrators that they have each read the pleadings and other materials filed by the parties;
  • A summary of the issues, including the type(s) of any security or product in controversy;
  • Damages and other relief requested;
  • Damages and other relief awarded;
  • A statement of any other issues resolved;
  • Allocation of forum fees and any other fees allocable by the panel;
  • Name(s) of the arbitrator(s);
  • Dates the claim was filed and the award rendered;
  • The number and dates of hearing session(s);
  • Location of the hearings; and
  • Arbitrator signatures.

 

A sample arbitration award is available for review under the "Related Links" section of this page.

 
Customer Code Rule  12904
Industry Code Rule  13904

 

Challenges to an Arbitration Award

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 on which a court may hear a party's appeal on an award. Specifically, the law permits a district court to vacate or overturn an arbitration award if it finds that:

 

  • the award was procured by corruption, fraud, or undue means;
  • there was evident partiality or corruption in the arbitrators;
  • the arbitrators were guilty of misconduct in refusing to postpone the hearing, even in light of sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy, or of any other misbehavior by which the rights of any party have been prejudiced;
  • the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made;
  • the arbitrators disregarded a clearly defined law or legal principle applicable to the case before them (Manifest Disregard of the Law); or
  • there is no factual or reasonable basis for the award (Complete Irrationality).

 

For more information, view the Federal Arbitration Act, 9 U.S.C. §10.
 

Collecting an Award or Settlement

Many arbitration cases end with a settlement between parties, either through direct negotiation or through mediation. Others end with an award.
If a claimant is awarded damages, the respondent must pay within thirty days of receiving the written award, unless the respondent files a motion to vacate.  A motion to vacate is a challenge to the validity of the award.  Courts decide these motions and can either vacate (or overturn), confirm, or modify the award.  A confirmed award stands as issued by the arbitrators. An award vacated by the courts is voided.

 

If a respondent does not file a motion to vacate and does not pay an award within thirty days after receiving the award, the claimant should notify FINRA. 
 

Customer Code Rule 12904
Industry Code Rules 13904
 

Failure to Pay an Award or Settlement

Under FINRA rules, industry parties must pay arbitration awards within 30 days or risk suspension by FINRA. Specifically, FINRA Rule 9554 contains expedited suspension procedures that address a brokerage firm's or broker's failure to pay FINRA arbitration awards. FINRA can suspend or cancel the registration of a broker or brokerage firm if that party does not comply with an arbitration award or settlement related to an arbitration or mediation.

However, a brokerage firm or broker may assert four defenses to the expedited suspension process:

 

  1. the brokerage firm or broker paid the award in full;
  2. the parties have agreed to installment payments or have otherwise settled the matter;
  3. the brokerage firm or broker has filed a timely motion to vacate or modify the award and such motion has not been denied; and
  4. the brokerage firm or broker has filed a petition in bankruptcy and the bankruptcy proceeding is pending or the award has been discharged by the bankruptcy court.

 

View Regulatory Notice 10-31 for additional information.