Arbitration
Arbitration Process
Although most business in the securities industry is completed without a problem, disputes and controversies will occasionally arise. Such disputes and controversies can be resolved by impartial arbitration at one of the organizations listed in the Services Directory. Arbitrations are conducted in accordance with the Uniform Code of Arbitration (Uniform Code) as developed by the Securities Industry Conference on Arbitration and the rules of the sponsoring organization where the claim is filed.
There are some differences among the rules of the sponsoring organizations, such as, who may serve as public arbitrators, the availability of prior awards, and whether your name will be made publicly available. Any questions regarding arbitration may be addressed to the Directors of Arbitration or their staff at the sponsoring organizations. In addition to initiating an arbitration, investors may file their complaints with the appropriate regulatory authorities, such as the Securities and Exchange Commission, state securities commissions, or one of the self-regulatory organizations listed in the Services Directory, when they believe there has been fraud or that other investors may be at risk. The regulatory agencies may then investigate the complaint and, if warranted, censure, fine, or suspend a wrongdoer.
This information is designed to assist prospective parties and their attorneys by explaining arbitration procedures and is not designed to give legal advice to any party or to anyone who contemplates use of these procedures. The procedures were developed for parties who represent themselves in an arbitration proceeding as well as those represented by counsel. The information here explains the procedures set forth in the rules and answers questions regarding them but is not an interpretation of, or a substitute for, the rules. We recommend that prospective parties carefully read the rules.
American Arbitration Association
Provides a forum to resolve many types of disputes through several different sets of arbitration rules.
FINRA Arbitration
FINRA Dispute Resolution Provides Investors with a Forum to File Complaints Against Brokerage Firms and Financial Advisers.
Judicial Arbitration/Mediation Services (JAMS)
JJAMS is one of the most popular arbitration forums where a company will require a consumer to file their case.
What is Arbitration?
Arbitration is a method of having a dispute between two or more parties resolved by impartial persons who are knowledgeable in the areas in controversy. Those persons are called arbitrators. Arbitration of broker/dealer disputes has long been used as an alternative to the courts because it is a prompt and inexpensive means of resolving complicated issues. There are certain laws governing the conduct of an arbitration proceeding that must be considered by those planning to use arbitration to resolve the dispute. Most importantly, perhaps, is the fact that an arbitration award is final and binding, subject to review by a court only on a very limited basis. Parties should recognize, too, that in choosing arbitration as a means of resolving a dispute, they generally give up their right to pursue the matter through the courts.
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