Following the Supreme Courts holding in Shearson/American Express, Inc. v. McMahon, 482 U.S. 220, 226 (1987), pre-dispute contracts to arbitrate securities claims are strictly enforceable. Any such claims against brokerage firms or their agents, including claims for punitive damages available under state law, are subject to arbitration in accordance with the Code of Arbitration Procedure.
Courts have long held that because of the liberal policy of promoting arbitration, all doubts of arbitrability are to be resolved in favor of arbitration. Some courts have also held that a party may even be bound by arbitration absent a signature on an agreement.
Arbitration of Disputes
Arbitration of disputes with broker/dealers has long been used as an alternative to the courts because it is devised as a prompt and inexpensive means of resolving complicated issues. There are certain laws governing the conduct of an arbitration proceeding that must be considered by those planning to use arbitration to resolve the 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.
FINRA Arbitration Panels vs Juries
Many practitioners believe that FINRA Arbitration Panels, containing an industry related non-public arbitrator are biased, and that juries may often render more favorable monetary verdicts than arbitration panels. However actions filed in both state and federal court, are subject to motions to dismiss, and motions for summary judgment, and accordingly, a plaintiff’s claims, based sometime on legal technicalities may never survive or be presented to a jury.
In arbitration, however, as stated in the Arbitrators’ Manual, “Equity is justice in that it goes beyond the written law. And it is equitable to prefer arbitration to the law court, for the arbitrator keeps equity in view, whereas the judge looks only to the law, and the reason why arbitrators were appointed was that equity might prevail.”
The FINRA Director of Arbitration decides which of FINRA’s hearing locations will be the hearing location for the arbitration based upon the closest hearing location to the customer’s residence at the time of the events giving rise to the dispute, unless the hearing location closest to the customer’s residence is in a different state, otherwise the customer may request a hearing location in the customer’s state of residence at the time of the events giving rise to the dispute.
FINRA offers hearing locations in every region of the country. In the Northeast region, FINRA offers hearing locations in Albany, NY; Augusta, ME; Boston, MA; Buffalo, NY; Hartford, CT; London, England; Manchester, NH; Montpelier, VT; New York, NY; Newark, NJ; Philadelphia, PA; Providence, RI; Syracuse NY. In the Western Region, FINRA offers hearing locations in lbuquerque, NM; Anchorage, AK; Boise, ID; Cheyenne, WY; Denver, CO; Helena, MT; Honolulu, HI; Las Vegas, NV; Los Angeles, CA; Phoenix, AZ; Portland, OR; Reno, NV; Salt Lake City, UT; San Diego, CA; San Francisco, CA; Seattle, WA. In the Southeast Region, FINRA offers hearing locations in Atlanta, GA; Baltimore, MD; Birmingham, AL; Boca Raton, FL; Charlotte, NC; Columbia, SC; Jackson, MS; Jacksonville, FL; Little Rock, AR; Memphis, TN; Miami, FL; Nashville, TN; New Orleans, LA; Norfolk, VA; Orlando, FL; Raleigh, NC; Richmond, VA; San Juan, PR; Tampa, FL; Washington, DC; Wilmington, DE. In the Midwest Region FINRA offers hearing locations in Bismarck, ND; Charleston, WV; Chicago, IL; Cincinnati, OH; Cleveland, OH; Columbus, OH; Dallas, TX; Des Moines, IA; Detroit, MI; Houston, TX; Indianapolis, IN; Kansas City, MO; Louisville, KY; Milwaukee, WI; Minneapolis, MN; Oklahoma City, OK; Omaha, NE; Pittsburgh, PA; Rapid City, SD; St. Louis, MO; Wichita, KS.
Guiliano Law Firm
The Guiliano Law Firm, P.C. is headquartered in Philadelphia, Pennsylvania. Our practice is multi-jurisdictional or national, where permitted by law, and substantially limited to the representation of investors for fraud, the sale of unsuitable investments, breach of fiduciary duty, and other forms of misconduct against brokerage firms, their agents, and other investment professionals.