Instead of filing a lawsuit in state or federal court, injured investors are required to file a claim before the Financial Industry Regulatory Association or FINRA.

In FINRA arbitrations, the customer or investor, files a “Statement of Claim,” which is not required, but typically looks like a Complaint that one may typically encounter in state or federal court.

Just like any other complaint, a Statement of Claim, should set forth the relevant facts and legal theories under which the “investor” beleives is entitled to relief or the recovery of their damages. Examples would include the violaton of the federal securities laws, state securities and/or blue sky laws, fraud, negligence, breach of fiduciary duty, the failure to supervise, etc.

Securities Broker Dealer Litigation Lawyers

The Brokerage Firm or the Respondent will file an Answer, just as would a defendant in a court proceeding, admitting or denying the allegations in the Statement of Claim, and typically setting forth an alternative statement of the facts, and supporting legal arguments, as to why the customer’s claims are legally or factually flawed, and why the customer claim ought to be denied and that the customer is not entitled to relief of any kind.

Unlike court proceedings where a plaintiff may have its case dismissed for failure to state a claim, or fail to state a claim with the required degree of specificity, including the failure to adequately plead scienter, or dismissed upon summary judgment (based upon the application of the law to uncontroverted facts), where the plaintiff can never get the opportunity to present their case to a jury, motions to dismiss are disfavored in FINRA Securities Arbitration.

Dispositive Motions

In 2009, the FINRA Board of Governors recently approved a proposal to limit significantly the number of dispositive motions filed in its arbitration forum and impose strict sanctions against parties who engage in abusive motions practices.

However, arbitration is very much a legal proceeding. In discovery, parties advance legal reasons or formalistic objections to resist the production of sometimes relevant and important documents. Although the Rules of Evidence are purported not to apply in FINRA arbitrations, Arbitration Panels will often, or at least are supposed to, rely upon well established evidentiary principals.

The Final Hearing

At a final arbitration hearing, the parties make opening statements as to what evidence and testimony will be presented to the Arbitration Panel. The direct testimony and cross examination of witness is presented to the Arbitration Panel. Documents are authenticated and introduced into evidence as exhibits, and at the end of the arbitration hearings, parties make closing statements or summations of the important evidence and the legal theories supporting their side of the case.

Although one is not required to hire a lawyer, or to even be a lawyer, in connection with the prosecution of customer claims in arbitration, arbitration is litigation.

Experience Matters

Respondents will hire experienced counsel to escape liability and to prevent a disfavorable award being entered against them, and anyone contemplating bringing any claim in FINRA securities arbitration as a public customer should also hire experienced counsel to navigate the system and to advance their interests in order to obtain a monetary recovery for the wrongful conduct of their broker or investment fiduciary.

Guiliano Law Group

Our practice is limited to the representation of investors. We accept representation on a contingent fee basis, meaning there is no cost to you unless we make a recovery for you. There is never any charge for a consultation or an evaluation of your claim. For more information, contact us at (877) SEC-ATTY.

For more information concerning common claims against stockbrokers and investment professionals, please visit us at