How Is Arbitration Begun?

To begin arbitration, the prospective claimant must do the following:

(1) File with FINRA online a typewritten or printed document stating the claim. This document should set forth the details of the dispute, including all relevant dates and names, in a clear, concise, and chronological fashion and should conclude by indicating what relief (e.g., money damages in a specific amount, performance of a particular agreement, interest, etc.) is requested. The claimant should attach copies of documents and supporting materials as exhibits to the Statement of Claim. 

(2) Small-Claims Procedures - If the amount of the claim is $50,000 or less, the claim will be processed under the Simplified Arbitration Procedures. In public customer disputes, unless the public customer requests a hearing, the claim will be decided solely on the basis of reading the parties' submissions. The arbitrator, however, also may request a hearing or require a party to submit additional documentation. Parties may ask to submit additional documents to an arbitrator who is deciding the case without a hearing.

(3) Service of Pleadings - After the initial Statement of Claim is served, it is each party's responsibility to provide every other party directly with any further pleadings, motions, or correspondence. Service is automatic when the filing is done online.

(4) Counsel - State whether the claimant will be represented by an attorney and, if so, the attorney's name, address, and telephone number.

(5) Location - State where the claimant wants the case to be heard and the reasons for that choice. The actual decision as to place of hearing is made by the Director of Arbitration. Arbitrators can be empaneled in many of the major urban areas throughout the country, but consideration generally will be given to a number of factors, including the convenience of the parties, the availability of necessary records or witnesses, and the availability of qualified arbitrators. Generally, in public customer cases, the hearing location is close to where the customer resided when the dispute arose regardless of a predispute agreement to the contrary.

(6) Complex Cases - In appropriate cases, parties may request special services such as mediation, findings of facts and conclusions of law, expedited hearings, and the appointment of arbitrators with special qualifications. Parties seeking special or additional services should advise the sponsoring SRO at the earliest time possible. Additional fees may be charged for these services. In many complex cases, the parties may desire block scheduling of hearing dates. To the greatest extent possible, such cases will be scheduled in three day blocks.

(7) Arbitrators -  Investors can now choose to have an arbitration panel consisting of all public arbitrators. 

(8) Submission Agreement - By signing the Submission Agreement, the claimant agrees to submit the dispute to arbitration and to abide by the decision (the "award") of the arbitrators. The claimant also agrees to be bound by the decision of the arbitrators with regard to any counterclaim (a claim against the claimant) permitted under these procedures that may be brought by an opposing party. Once a Submission Agreement has been signed, the procedures and timing set out in the Uniform Code become operative and binding. Generally, parties may not withdraw the Submission Agreement and Claim without the consent of either the other parties or the arbitrators.

(9) Filing Fees and Deposits - Include a check or money order made payable to the sponsoring organization for the appropriate non-refundable filing fee and hearing session deposit. Where multiple hearing sessions are scheduled or conducted the arbitrators are authorized to require additional hearing session deposits by one or more parties. Additional deposits also may be required to be made for prehearing conferences with an arbitrator and for the postponement of a scheduled hearing date after the arbitrators have been selected. The arbitrators will determine in the final award if these deposits will be returned or assessed to another party. See the arbitration rules of the sponsoring SRO for the definition of a hearing session, as well as the appropriate fee and deposit.

(10) Disclosure of Arbitration Award - At some sponsoring organizations, public customers must state in writing whether they either permit or decline to permit the inclusion of their names in the public version of the award.

(11) Incomplete Filing of a Claim - A filing may be returned if it does not comport with the rules.

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