Securities Arbitration
When your broker or financial advisor causes investment losses through misconduct, negligence, or fraud, FINRA arbitration offers a faster path to recovery than traditional court litigation. A skilled FINRA arbitration lawyer helps you navigate this specialized process and fight to recover the losses you suffered.
According to FINRA’s 2024 Dispute Resolution Statistics, 84% of customer arbitration cases closed through settlement or paid damages. With the right legal representation, you can pursue accountability from the brokerage firms and financial professionals who failed you.
Key Takeaways
- FINRA arbitration resolves investment disputes in 12-15 months on average, much faster than court litigation
- Investors have six years from the event causing losses to file a FINRA claim under Rule 12206
- 84% of customer cases closed through settlement or paid damages in 2024
- Claims over $100,000 are heard by a three-arbitrator panel
- An experienced FINRA arbitration lawyer who understands defense tactics can significantly improve your chances of recovery
What Is FINRA Arbitration?
FINRA (Financial Industry Regulatory Authority) is a congressionally-authorized non-profit organization that oversees approximately 4,700 brokerage firms and 635,000 registered representatives in the United States. When disputes arise between investors and their brokers or brokerage firms, FINRA provides a binding arbitration process to resolve these conflicts outside of court.
Most investors agree to FINRA arbitration when opening brokerage accounts. The customer agreement typically contains a pre-dispute arbitration clause requiring disputes to be resolved through FINRA rather than the courts. While this limits your options, FINRA arbitration offers distinct advantages including faster resolution and lower costs than traditional litigation.
Important: Under FINRA Rule 12206, you have six years from the occurrence or event giving rise to your claim to file an arbitration case. Missing this deadline can permanently bar your ability to seek recovery.
Why Hire a FINRA Arbitration Lawyer?
While investors can represent themselves in FINRA arbitration, brokerage firms are almost always represented by experienced defense attorneys. Facing a sophisticated defense team without legal counsel puts you at a significant disadvantage.
According to FINRA’s guidance on securities arbitration, hiring an attorney is recommended when:
- The arbitration process and procedures are unfamiliar to you
- Your case involves complex legal or regulatory issues
- Substantial damages are at stake
- You need help evaluating proposed arbitrators from FINRA’s lists
- You would benefit from objective guidance during an emotionally charged dispute
With a FINRA Arbitration Lawyer
- Strategic case evaluation and damage calculation
- Proper claim drafting to preserve all causes of action
- Discovery of critical evidence from the brokerage firm
- Expert witness coordination
- Experienced arbitrator selection
- Professional hearing presentation
Without Legal Representation
- Risk of missing critical deadlines or procedural requirements
- Limited knowledge of what evidence to request
- No experience evaluating arbitrator backgrounds
- Facing trained defense attorneys alone
- Potential failure to raise all valid claims
- Difficulty presenting persuasive arguments
Common FINRA Arbitration Claims
A FINRA arbitration lawyer handles disputes arising from various forms of broker misconduct and brokerage firm negligence. Based on FINRA’s 2025 case data, breach of fiduciary duty and negligence claims are the most frequently filed.
| Claim Type | Description | Common Evidence |
|---|---|---|
| Breach of Fiduciary Duty | Financial advisor failed to act in your best interests | Account statements, advisor communications, suitability analysis |
| Negligence | Broker failed to meet reasonable professional standards | Industry standards, comparable portfolios, expert testimony |
| Churning | Excessive trading to generate commissions | Turnover ratio, cost-equity ratio, trading records |
| Unsuitable Investments | Recommendations not appropriate for your risk profile | Investment policy statement, risk tolerance questionnaires |
| Unauthorized Trading | Trades executed without your consent | Trade confirmations, account authorizations, correspondence |
| Misrepresentation | False or misleading statements about investments | Marketing materials, emails, recorded calls |
| Failure to Supervise | Brokerage firm failed to oversee its brokers properly | Compliance records, supervisory procedures, prior complaints |
The FINRA Arbitration Process: Step by Step
Understanding the FINRA arbitration process helps you know what to expect and how a FINRA arbitration lawyer guides you through each stage.
Phase 1: Filing
Timeline: Day 1-30
- Submit Statement of Claim
- Pay filing fees
- FINRA serves respondent
- Respondent has 45 days to answer
Phase 2: Selection
Timeline: Month 2-4
- FINRA provides arbitrator lists
- Parties rank and strike candidates
- Panel appointed
- Initial prehearing conference scheduled
Phase 3: Discovery
Timeline: Month 4-8
- Exchange of documents
- Production requests
- 60-day deadline from answer
- Possible discovery disputes
Phase 4: Preparation
Timeline: Month 8-12
- Expert witness designation
- Prehearing briefs
- Motion practice (if any)
- Settlement discussions
Phase 5: Hearing
Timeline: Month 12-15
- Opening statements
- Witness testimony
- Cross-examination
- Closing arguments
Phase 6: Decision
Timeline: 30 days post-hearing
- Arbitrator deliberation
- Written award issued
- Award is binding
- Limited appeal rights
FINRA Arbitration Timeline and Statistics
Understanding realistic timelines helps set proper expectations for your case. According to FINRA’s official 2024 statistics, case duration has improved in recent years.
| Metric | 2023 | 2024 | 2025 (YTD) |
|---|---|---|---|
| Average Case Duration | 14.6 months | 12.5 months | 13.6 months |
| Cases Going to Hearing | 15.5 months avg | 17.3 months avg | 16 months avg |
| Customer Win Rate (at hearing) | ~28% | 26% | 30% |
| Settlement Rate | ~70% | ~70% | 60% |
| Closure Rate (settlement or award) | 82% | 84% | Pending |
Understanding the Statistics: While the customer win rate at hearing averages around 30%, this does not reflect the full picture. The majority of cases settle before reaching a final hearing. The 84% closure rate through settlement or paid damages shows that most investors with legitimate claims receive some recovery when properly represented.
How Claim Size Affects Your Case
FINRA structures arbitration proceedings based on the amount in dispute. This affects the number of arbitrators, hearing format, and overall process complexity.
Claims Under $50,000
Simplified Arbitration
- Single arbitrator
- Option for paper-only decision
- Phone hearing available
- Shorter timeline
- Lower filing fees
Claims $50,000-$100,000
Standard Arbitration
- Single arbitrator
- In-person hearing typical
- Full discovery process
- Moderate filing fees
- 12-14 month average
Claims Over $100,000
Panel Arbitration
- Three-arbitrator panel
- In-person hearing required
- Full discovery and motions
- Higher filing fees
- 15-18 month average
What to Look for in a FINRA Arbitration Lawyer
Choosing the right FINRA arbitration lawyer significantly impacts your chances of recovery. Securities arbitration is a specialized field requiring specific experience and knowledge.
Essential Qualifications
- FINRA Arbitration Experience: Look for attorneys who focus primarily on securities arbitration, not general litigation
- Track Record: Ask about case outcomes and recovery rates
- Industry Knowledge: Understanding of brokerage operations, compliance requirements, and investment products
- Defense Experience: Attorneys who previously defended broker-dealers understand how the other side thinks
- Arbitrator Selection Expertise: Knowledge of arbitrator tendencies and backgrounds
Questions to Ask During Consultation
- How many FINRA arbitration cases have you handled?
- What is your experience with claims similar to mine?
- How do you evaluate arbitrator lists?
- What is your fee structure?
- Will you personally handle my case or delegate to associates?
- What is your assessment of my claim’s strengths and weaknesses?
Finding an Attorney: The Public Investors Arbitration Bar Association (PIABA) is a professional organization of attorneys who represent investors in securities arbitration. Their member directory is a valuable resource for finding qualified FINRA arbitration lawyers.
The Advantage of Defense-Side Experience
One of the most valuable qualifications a FINRA arbitration lawyer can have is prior experience defending broker-dealers and financial advisors. This perspective provides critical insights that benefit investors.
What Defense Experience Reveals
- How brokerage firms evaluate claims internally
- Common defense strategies and how to counter them
- What evidence firms try to hide or minimize
- Settlement authority levels and timing
- Which arguments resonate with arbitrators
- Compliance failures firms want to conceal
How This Benefits You
- Anticipate defenses before they are raised
- Target discovery to uncover damaging evidence
- Recognize when settlement offers are fair
- Present claims in the most compelling manner
- Challenge common defense arguments effectively
- Navigate arbitrator selection strategically
Costs of FINRA Arbitration
Understanding the cost structure helps you plan for your case and evaluate fee arrangements with potential attorneys.
FINRA Filing Fees
FINRA charges filing fees based on claim size. For claims over $100,000, filing fees range from several hundred to a few thousand dollars. These fees cover the administrative costs of the arbitration process.
Attorney Fee Arrangements
Most FINRA arbitration lawyers representing investors work on a contingency fee basis. This means:
- No upfront attorney fees
- The attorney is only paid if you recover money
- Fee percentage is discussed during your free consultation
Case Costs
You remain responsible for case costs, which may include:
- Filing fees
- Expert witness fees
- Deposition transcripts
- Document production costs
- Hearing-related expenses
We can discuss cost estimates and payment arrangements during your consultation.
Why Choose Varnavides Law for FINRA Arbitration
At Varnavides Law, we bring a unique perspective to investor representation in FINRA arbitration. Attorney Gary Varnavides spent 10 years at Sichenzia Ross Ference LLP defending broker-dealers before founding this firm to represent investors.
Our Credentials
- Defense Experience: 10 years defending broker-dealers means we know their playbook
- Super Lawyers Recognition: Rising Star 2015-2023, top 2.5% of attorneys in the NY Metro area
- Multi-State Licensing: Licensed in California, New York, and New Jersey
- Securities Focus: Dedicated practice in securities law and investment fraud
Our Approach
- Thorough case evaluation before accepting representation
- Aggressive pursuit of all available claims
- Strategic arbitrator selection based on experience
- Clear communication throughout the process
- Contingency fee arrangements available
- Free initial consultation
Frequently Asked Questions About FINRA Arbitration
How long does FINRA arbitration take?
According to FINRA’s 2024 statistics, the average case duration is approximately 12.5 months. Cases that proceed to a full hearing typically take 15-18 months. Many cases settle earlier, with approximately 60% of cases resolving through settlement. The timeline depends on claim complexity, panel scheduling, and whether parties engage in extensive discovery or motion practice.
What are the chances of winning a FINRA arbitration case?
The customer win rate at hearing averaged 30% in 2025, up from 26% in 2024. However, this statistic only reflects cases that proceed to a final hearing. Most cases (approximately 84%) close through settlement or paid damages without requiring a full hearing. With strong evidence and experienced legal representation, investors with legitimate claims often achieve favorable outcomes.
How much does it cost to hire a FINRA arbitration lawyer?
Most FINRA arbitration lawyers representing investors work on a contingency fee basis, meaning you pay no upfront attorney fees. The lawyer receives a percentage of any recovery, with the specific percentage discussed during consultation. You remain responsible for case costs such as filing fees and expert witnesses, though arrangements can often be made to defer these costs.
Can I represent myself in FINRA arbitration?
Yes, you have the right to represent yourself (known as appearing pro se). However, brokerage firms are almost always represented by experienced attorneys. FINRA provides resources for self-represented parties, and some law schools offer securities arbitration clinics for investors with smaller claims. For significant claims, legal representation substantially improves your chances of success.
What is the deadline for filing a FINRA arbitration claim?
Under FINRA Rule 12206, you have six years from the occurrence or event giving rise to your claim to file with FINRA. This is known as the eligibility rule. State statutes of limitations may also apply to specific causes of action, which could be shorter. Consulting a FINRA arbitration lawyer promptly after discovering potential misconduct is essential to preserve your rights.
Can I appeal a FINRA arbitration decision?
FINRA does not provide an internal appeals process. However, under the Federal Arbitration Act and state arbitration laws, you can petition a court to vacate an arbitration award under very limited circumstances, such as arbitrator misconduct, corruption, or evident partiality. Courts rarely overturn arbitration awards, so the hearing outcome is typically final.
What types of damages can I recover in FINRA arbitration?
Investors may recover compensatory damages representing actual financial losses, including the decline in account value attributable to misconduct. Arbitrators may also award interest, attorney fees (in some cases), and punitive damages where appropriate. The specific damages available depend on the claims asserted and applicable law.
What happens if the broker or firm cannot pay the award?
While arbitration awards are legally binding, collection can be challenging if the respondent lacks resources. FINRA can bar firms or individuals from the industry for failing to pay awards, but this does not guarantee collection. Your attorney should evaluate the respondent’s financial condition when assessing case viability and may target the brokerage firm’s resources rather than individual brokers alone.
Take Action to Protect Your Investment Rights
If you have suffered investment losses due to broker misconduct, unsuitable recommendations, or other forms of securities fraud, time limits apply to your ability to seek recovery. The six-year FINRA eligibility rule is absolute, and waiting to act could permanently bar your claim.
A free consultation with a FINRA arbitration lawyer can help you understand your options and evaluate whether you have a viable claim. We will review your situation, explain the arbitration process, and provide an honest assessment of your case.
Schedule Your Free Consultation
Contact Varnavides Law today to discuss your investment dispute. With 10 years of defense experience, we understand how brokerage firms operate and how to hold them accountable.
