How as Arbitration Begun?
Fortunately, everything is done online now, which makes beginning in arbitration case significantly easier. After I decide to take an arbitration case, the next most important task is drafting what is called the Statement of Claim. Unlike in court, where the claim that is filed is rather terse, in securities arbitrations, the Statement of Claim may contain pages and pages of factual detail. Because there are no depositions in securities arbitrations, it is important to understand the brokerage firm defenses by requiring it to respond to a very detailed Statement of Claim. The Statement of Claim will not only spell out the facts of what happened in the case and what the brokerage firm and stockbroker did wrong but will likewise contain pages and pages of legal violations. Fortunately, when a stockbroker commits a wrongdoing, that single act of wrongdoing can violate a whole host of legal rules.
The Statement of Claim is filed at the FINRA online portal, along with a Submission Agreement signed by my client. The Submission Agreement is a one-page document that all parties to the arbitration must sign and that essentially states that you are submitting your case to arbitration and you understand that it will be conducted under FINRA’s rules and that you agree to abide by the Award.
A filing fee is also paid at the outset of the arbitration which is calculated based upon the amount of money sought in damages in the case. The following is FINRA’s chart for filing feesFiling Fees For Claims Filed by Customers. Associated Persons, and Other Non-Members
|Acoumt of Claim (exclusive of interest and expenses)||Filing Fees|
|$ .01 to $1,000||$50|
|$ 1,000.01 to $2,500||$75|
|$2,500.01 to $5,000||$175|
|$5,000.01 to $10,000||$325|
|$10,000.01 to $25,000||$425|
|$25,000.01 to $50,000||$600|
|$50,000.01 to $100,000||$975|
|$100,000.01 to $500,000||$1,425|
|$500,000.01 to $1,000,000||$1,725|
|$1,000,000.01 to $5,000,000||$2,000|
|Non-Monetary / Not Specified||$1,575|
I always put my requested hearing location in the Statement of Claim. The hearing location is close to where the customer resided when the dispute arose. This is almost always the state or city where my client resides.
FINRA has special rules for small cases (less than $100,000 in damages) and expedited cases for elderly or ill clients.
All other activity in the case occurs through FINRA’s online portal where the case resides. The arbitrator lists, bios, and prior awards are all served electronically, as well as all motions and decisions of the arbitrators. There may be extensive communications between me and opposing counsel over the course of the case, but again, those communications are all through email or telephone. It may seem strange to say, but because my practice is nationwide, I have had a number of cases that settled where I never met my client. Even that is not a disadvantage these days with Skype. It is far more important to hire a knowledgeable, experienced lawyer who will work aggressively to recover your losses than to hire a local attorney who may not have securities experience.
Relatively early in the case, and after the arbitrators are selected, a telephone conference takes place with the lawyers and the arbitrators on the phone. It’s called a Pre-Hearing conference. The purpose of this call is to schedule the case – the hearing dates and other dates such as discovery and motion deadlines, as well as brief deadlines.
After filing, arbitrator selection, discovery battles, and case preparation, all that remains is to arbitrate the case!
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