1. How long do I have to file an arbitration? Is there a statute of limitations?
To take advantage of your legal rights, you must take action promptly or you may lose the right to seek a remedy or recover funds.
Code of Arbitration Procedure Rule 12206 for Customer Disputes and Rule 13206 for Industry Disputes outline the time limits for submitting a claim in arbitration. These rules allow a claim to be filed within 6 years of the occurrence or event giving rise to the cause of action. However, time restrictions, called "statutes of limitations," may be shorter than 6 years. A respondent named in your case might raise a statute of limitations that is shorter than 6 years as a defense to your action. To determine whether any statute of limitations may apply to your case, and to discuss your rights and remedies, we suggest that you contact an attorney.
Upon receipt of your filing, your case will be assigned to the appropriate regional office and you will be provided with a case number.
FINRA will notify you of the staff person assigned to your case during this stage of the process. You may direct any questions to that staff person. Always reference your case number when you write or call about your case to enable that staff member to assist you quickly.
3. Where do I file my Statement of Claim?
If you are an investor representing yourself and have not registered to use the DR Portal, you should file your Statement of Claim and other related documents with the New York Office. The New York Office address is:
The Office of Dispute Resolution
One Liberty Plaza
New York, New York, 10006
The Office of Dispute Resolution will then provide you with the name of the person and the office with which you should communicate for future filings and correspondence. You may also file your claim online with the DR Portal.
4. Who will serve the Statement of Claim?
FINRA will serve your Statement of Claim on each of the respondents that you list and against whom you assert a claim. FINRA also will notify the respondents and you of the anticipated initial hearing location of the case.
After the initial Statement of Claim is served, FINRA is not obligated to serve any pleadings, motions or correspondence on any party. You and the other parties must serve and file these other documents via the DR Portal.
Pursuant to Code of Arbitration Procedure Rule 12303(a) for Customer Disputes and Rule 13303(a) for Industry Disputes, if you are a respondent (the entity or person responding to a claim), you have 45 calendar days to serve and file answers to claims.
Your answer must specify all defenses available to each claim.
5. How do I serve and file a Statement of Answer?
In contrast to the initial claim, when you answer a claim you must serve every party with copies of your executed Submission Agreement and Statement of Answer via the DR Portal. Parties include all respondents and claimants.
6. Can I obtain an extension of time to serve and file a Statement of Answer?
With claimants’ written consent, you may obtain extensions of time to file a Statement of Answer. FINRA staff will not grant you an extension of time to answer, except upon a showing of good cause.
With your Statement of Answer, you also may serve and file claims. The types of claims include the following:
counterclaims that are asserted against claimants;
cross-claims that are asserted against already named co-respondents; and
third-party claims that are asserted against a party not named in any previous pleading.
If you assert counterclaims, cross-claims or third-party claims, the filing fee will be determined by the highest claim amount, excluding interest and expenses.
7. How do I serve and file counterclaims and cross-claims?
You must serve every party you list and against whom you assert a claim with a copy of your Statement of Answer containing a counterclaim or cross-claim via the DR Portal.
8. How do I serve and file third-party claims?
You must serve every new party you list and against whom you assert a claim with a copy of your Statement of Answer containing third-party claim(s), and you should establish proof of service.
You also must serve the new respondent with the Statement of Claim and all other pleadings.
You must send one copy of the Statement of Answer containing your third-party claim(s) and the executed Submission Agreement to all other parties and FINRA via the DR Portal.
9. Will the Office of Dispute Resolution accept cases brought against FINRA firms involving variable annuities?
Yes. The Office of Dispute Resolution accepts cases brought against FINRA member firms involving variable annuities.
10. Does filing a FINRA arbitration or mediation toll the statute of limitations in a securities unsuitability case?
Pursuant to Code of Arbitration Procedure Rule 12206(c) for Customer Disputes and Rule 13206(c) for Industry Disputes, when a claimant files a statement of claim in arbitration, any time limits for the filing of the claim in court will be tolled while FINRA retains jurisdiction of the claim.
11. If an arbitration claim is served against a registered representative, is the employing broker-dealer notified?
In general, an employing broker-dealer is not notified if an arbitration claim is served against a registered representative. However, an employing broker-dealer may be notified of an arbitration claim against a registered representative in the following circumstances:
If the employing broker-dealer is also named in the arbitration claim, the employing broker-dealer will be put on notice that its registered representative was named.
If service of the Statement of Claim cannot be effected at the registered representative's home address, the Office of Dispute Resolution will attempt to effect service at the registered representative's current employment address as listed on Central Registration Depository ("CRD®") records.
In accordance with Code of Arbitration Procedure Rule 12901 for Customer Disputes and Rule 13901 for Industry Disputes, if the broker-dealer employed the registered representative at the time the dispute arose, the broker-dealer will be assessed member fees.
12. If I win an arbitration case does the other side (broker-dealer) reimburse my fees and costs? Can I request punitive damages and if yes, how much?
You need to decide what relief to ask for based on the facts of your case. The final decision will be made by the arbitrators in the award after considering the evidence presented. The Office of Dispute Resolution is not authorized to give you legal advice or to comment on the merits of your case. If you feel that you need legal advice, we recommend that you consult a lawyer. For more information, please visit our How to Find an Attorney Web page.
13. What happens to my arbitration request if I don't submit a fee along with my Statement of Claim?
Your claim will be assigned a case number and a deficiency notice will be sent to you indicating the amount due (along with any other deficiencies). Pursuant to Code of Arbitration Procedure Rule 12307 for Customer Disputes and Rule 13307 for Industry Disputes, if all deficiencies are not cured within 30 days, FINRA will close your case without serving your Statement of Claim.
14. Do I need a lawyer for arbitration?
FINRA rules do not require parties to be represented by attorneys. Parties may appear without attorneys unless state law prohibits such representation, the person is currently suspended or barred from the securities industry in any capacity, or the person is currently suspended from the practice of law or disbarred. Please be aware that representation by a non-attorney might be considered to be the unauthorized practice of law in some jurisdictions, so please check with the relevant State Bar (or similar organization) for more information. The Office of Dispute Resolution staff members are often asked to make recommendations or referrals regarding legal representation. In our capacity as impartial administrators of this alternative dispute resolution forum, rather than specific recommendations, we've provided some general information on obtaining legal assistance in our How to Find An Attorney section of our website.
15. Would I feel intimidated if I represent myself in the arbitration or mediation process without an attorney?
Most parties are represented by counsel in arbitration and mediation. You should presume that the other party will be represented by an attorney. Here are some factors to consider in determining whether you need an attorney in arbitration or mediation:
Do you have a clear understanding of how the arbitration or mediation process works, and of your role in the process?
Are you willing to openly discuss settlement options in your case?
Are you comfortable speaking directly to the other party involved in this matter and negotiating a settlement that is in your best interest?
Can you present the facts and produce relevant information that will assist the other party in understanding any underlying emotional issues and your practical interests?
Will you be comfortable if the arbitrator or mediator, rather than your own representative, helps to assess the strengths and recognize any potential weaknesses in your case, and those of the other party, as a tool in reaching settlement?
Are you willing to explore creative solutions that you may not have previously considered, in order to find resolution to your case?
Are you comfortable drafting the terms of a settlement agreement with the other party, even if counsel represents the other party?
The mediation case flow and arbitration case flow pages provide step-by-step explanations of the arbitration and mediation processes.
16. Can I file an arbitration through the Office of Dispute Resolution against a doctor, lawyer, or other professional?
The Office of Dispute Resolution operates the largest securities dispute resolution forum in the world. We do not handle non-securities industry claims.
17. Are members and/or associated persons required to arbitrate all disputes?
Pursuant to Code of Arbitration Procedure Rule 12200 for Customer Disputes, members and/or associated persons are required to arbitrate any dispute between a customer and a member and/or associated person if the dispute arises in connection with the business activities of the member or the associated person (except disputes involving the insurance business activities of a member that is also an insurance company), and the customer either requested arbitration or the parties entered into a written agreement to arbitrate. Pursuant to Code of Arbitration Procedure Rule 13200 for Industry Disputes, a dispute must be arbitrated under the Code if the dispute arises out of the business activities of a member or an associated person and is between or among:
Members and Associated Persons; or
Disputes arising out of the insurance business activities of a member that is also an insurance company are not required to be arbitrated under the Code.
18. How do I calculate damages if the amount is unknown and unascertainable at the present time?
You are free to request unspecified damages (to be proved at hearing) in your Statement of Claim. With respect to the process of calculating and proving your damages, please be advised that FINRA is not authorized to give you legal advice or to comment on the merits of your case. If you feel that you need legal advice, we recommend that you consult a lawyer. The Office of Dispute Resolution staff members are often asked to make recommendations or referrals regarding legal representation. Please see our How To Find An Attorney Web page for more information.
19. If we have filed an investor complaint, can we file to start mediation or arbitration?
Yes. FINRA sponsors a forum for securities dispute resolution. Our arbitration program administers claims involving customers of brokerage firms and disputes between brokerage firms and their employees. We also offer a mediation program. Mediation and arbitration are non-judicial methods of settling disputes between two or more parties. Any type of dispute, claim, or controversy arising out of business dealings with any FINRA member brokerage firm can be resolved in mediation or arbitration. Arbitration is a method of having a dispute between two or more parties resolved by impartial persons. There are certain laws governing the conduct of an arbitration proceeding that must be considered by those planning to use arbitration to resolve a dispute. Most importantly, perhaps, is the fact that an arbitration award is final and binding, subject to review by a court only on a very limited basis. Parties should recognize, too, that in choosing arbitration as a means of resolving a dispute, they generally give up their right to pursue the matter through the courts. You may also want to consider mediation of this dispute through FINRA. Mediation is an informal, voluntary process in which an impartial person, trained in facilitation and negotiation techniques, helps the parties reach a mutually acceptable resolution. You can find information on the arbitration and mediation process at FINRA on our website. Absent a pre-existing agreement to arbitrate disputes between you and the firm, you may also be free to pursue this matter by filing a lawsuit in a court of competent jurisdiction. The Office of Dispute Resolution is not authorized to give you legal advice or to comment on the merits of your case. If you feel that you need legal advice, we recommend that you consult a lawyer.
20. Can I request attorney fees in my Statement of Claim?
Attorneys' fees are frequently requested in arbitration. Arbitrators may consider awarding attorneys' fees, but the procedure and law varies from state to state. It is appropriate for the arbitrators to request the parties to brief this issue.
21. What is FINRA's "simplified arbitration" program?
22. Can an attorney sign the Submission Agreement on behalf of a party?
Yes. Attorneys and other persons filing claims may sign on behalf of a party if they have a written/verbal power of attorney or actual/implied authority from the party to sign on the party's behalf.
23. Our claim is for $75,000, and we want a single arbitrator to decide our case. Can the respondents obtain a three arbitrator panel by asserting a counterclaim in excess of $100,000?
Yes. In this scenario, FINRA will appoint a three arbitrator panel because the amount of the counterclaim is over $100,000. The $100,000 threshold will be applied to claimants' claims in the aggregate and to respondents' claims in the aggregate. In other words, if either the claimants or respondents make a claim over $100,000 then three arbitrators will be appointed.
Can a respondent obtain a three arbitrator panel by adding a counterclaim less than $100,000, but which brings the total aggregate amount of the dispute to over $100,000? (e.g., the initial claim is $75,000 and the counterclaim is $60,000). No. FINRA will not combine claimants' claims with respondents' claims in determining whether the $100,000 threshold has been met.
24. Will my request for punitive damages change the number of arbitrators appointed to decide my case?
If your claim is for $100,000 or less, exclusive of interest and expenses, one arbitrator will be selected to decide the case unless both parties agree in writing to a panel of three arbitrators. If your claim is more than $100,000 or an unspecified or non-monetary amount, a panel of three arbitrators will be selected to decide the case. FINRA will combine the specified dollar amounts of compensatory and punitive claims when calculating claim amounts but will exclude interest and expenses. Attorneys' fees will also be excluded from the calculation. For a claim of $90,000 in compensatory damages and unspecified punitive damages, FINRA will deem the claim amount to be $90,000 and appoint one arbitrator. If the claim sought a specific amount of punitive damages (e.g. $90,000), FINRA would add the $90,000 punitive claim to the $90,000 compensatory claim for a total claim amount of $180,000. FINRA would appoint three arbitrators in this scenario.
25. What is a Submission Agreement?
A Submission Agreement is a document that signifies that you have elected to submit a claim to the Office of Dispute Resolution and that you agree to abide by the selected arbitrator(s)' decision on any claims filed by the parties. Please note that parties should not alter the language in the Submission Agreement. You can find the Submission Agreement under Forms & Tools located on our Arbitration and Mediation page at Finra.org. You can also complete the Submission Agreement when filing your claim online with the DR Portal.