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Arbitration and mediation are used to resolve securities and employment disputes between and among investors, brokerage firms and individual brokers. Both of these alternative dispute resolution methods offer a more timely, efficient and affordable way of resolving issues.

FINRA facilitates investors filing an arbitration claim or mediation request when they have a dispute involving the business activities of a brokerage firm or a broker.

However, the alleged act resulting in the claim must have taken place in the last six years. Additionally, you must use one of FINRA’s certified Mediators/Arbitrators, like KIM L. KIRN.

Resolving disputes through FINRA mediation and arbitration is often the best choice for a number of reasons, though it’s important to understand how the process works.

Filing an Investor Complaint Vs. Dispute Resolution

Many people get confused between filing an investor complaint and dispute resolution. An Investor Complaint alerts FINRA of any potentially fraudulent or suspicious activities by a broker or brokerage firm and FINRA investigates.

Dispute Resolution is initiated by an investor with FINRA administering the arbitration.  Both processes can lead to mediation as a way to recover any monetary or security losses as a result of fraud or negligence by the broker/firm.

You can take both courses of action when looking to rectify your securities and employment disputes.

FINRA Arbitrations

Arbitration is similar to going to court, but it is usually faster, cheaper and less complex than litigation. FINRA provides investors with a list of FINRA-approved arbitrators that both parties must agree upon. The arbitrator’s decision, called an award, is final and binding.

When resolving disputes through arbitration, you can expect a FINRA arbitrator or panel (consisting of three arbitrators) to listen to the arguments provided by both parties, study the testimonial and/or documentary evidence, and then make a decision.

The size of the claim will determine how the arbitration process works and how many arbitrators oversee your claim.

  • More than $100,000: in-person hearing decided by a panel of three arbitrators, with one chairing the hearing
  • Between $100,000 and $50,000: in-person hearing decided by one arbitrator
  • Up to $50,000: no in-person hearing required through the Simplified Arbitration Process, with the arbitrator deciding the case by reviewing all the materials presented by the parties

However, during the COVID-19 pandemic, FINRA has offered alternative options to in-person hearings, since all in-person hearings are currently on hold until at least January 31, 2021.

If all parties agree, the hearing can take place over Zoom or telephone.

Learn more about FINRA’s arbitration process, including which cases are eligible.

FINRA Mediations

Mediation offers a flexible alternative to arbitration and in light of COVID restrictions, a much faster alternative. With all FINR cases on hold, mediation is the only way to resolve an investor issue right now.

Interestingly, the mediation process can be initiated before an arbitration or even during an arbitration (so long as it occurs before the Award is issued).  FINRA mediations are an informal process in which a trained, impartial mediator facilitates negotiations between disputing parties, helping them find a mutually acceptable solution. To see a pop-culture example of mediation, check out The Office’s “Conflict Resolution” episode (or read our blog synopsis).

Both parties in a dispute must agree to mediation. However, FINRA does not require parties to mediate. FINRA mediators have subject-matter expertise, so parties can select a mediator who is knowledgeable in the particular securities or business area that is in dispute.

KIM L. KIRN has been a mediator with FINRA for over ten years and has worked on many relevant cases during her time as a litigator.

Learn more about FINRA’s mediation process, including how mediation session works.

Want to use KIM L. KIRN as your next FINRA mediator or arbitrator? Contact her today to learn more!