Can I be Represented by an Attorney?
If you have a securities claim against a brokerage firm, you should be represented by an attorney. The brokerage firm will certainly have a lawyer or two. You can represent yourself – also called “pro bono” representation – but there's an old saying that a person who represents himself has a fool for a client.
Parties have an absolute right to be represented by a lawyer and may do so at any stage of the arbitration. So, you could start out pro bono and hire a lawyer mid-process.
The nice thing about hiring a lawyer is if the lawyer represents you on a contingency basis, her interests are aligned with yours; it removes the conflicts of interest that can exist with hourly lawyers. Your lawyer will perform the work with relatively little involvement on your part. All documents and pleadings relating to your case are sent to your lawyer, not you. You will need to produce various documents to your lawyer and speak with her about developments that happen in the case and, if the case is arbitrated, appear at the arbitration. Your lawyer will be spending her time selecting arbitrators and, probably the most important task, is fighting to discover the documents that are needed to prove the case. Unfortunately, the key documents are always in the possession of the brokerage firm, because it is the firm that’s required by law to retain certain documents. A brokerage firm may produce thousands of pages documents in a typical securities arbitration case. It is critical that you hire a lawyer who is familiar with these documents and knows which of them help your case versus which of those hurt your case.
FINRA cannot recommend or provide counsel in the arbitration nor can employees of that organization provide legal advice. Parties who do not have counsel and wish to be represented may want to contact the local bar association for a referral. It is critical that an investor hire a lawyer with experience in securities arbitration. If your claim for damages is less than $100,000, then you may have trouble finding a lawyer to represent you, as this is considered a small dollar amount.
One thing to be wary of are companies that promise representation but who have no lawyers. These are referred to by FINRA as “Non-Attorney Representatives” (NARs). In FINRA Regulatory Notice 17-34, FINRA expressed concern about these representatives because, unlike lawyers, there is no professional rules of conduct that applies to them. In addition, NAR firms typically do not have malpractice insurance, so if you end up with a claim against the firm, any recovery would be limited to the assets of the corporation. FINRA is considering placing restrictions on NAR representation in arbitration.
Another major disadvantage of having a non-lawyer represents you is that all communications between you and your representative would not be privileged. Legal privilege attaches only when a lawyer is involved. Also, because NARs are not trained in law, they cannot give legal advice. Handling a securities arbitration from start to finish involves a significant amount of “legal” work, therefore unless the claim for damages is less than $100,000, I do not recommend that investors hire a Non-Attorney Representative.
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