Whether arbitration is the right path
Most brokerage account agreements contain a clause requiring arbitration in FINRA's dispute resolution forum, and FINRA rules generally allow a customer to require a member firm to arbitrate even without one. Claims commonly involve unsuitable recommendations or unauthorized trading, along with misrepresentation and failures of supervision. FINRA has its own eligibility window for claims, and state limitation periods can also come into play, so waiting can cost options. Losses alone do not establish a claim; the question is usually whether the firm or broker did something wrong that caused them. If the firm has closed or been expelled, recovery questions become more complicated, and that should be assessed early.
Gathering the record
Collect account statements, trade confirmations, the account opening documents including what they say about your objectives and risk tolerance, and any written or recorded communications with the broker. Be ready to walk your lawyer through what you were told before key transactions, rather than posting about it publicly or arguing it out with the firm. Check BrokerCheck for the broker's history, including prior complaints. If you have already complained to the firm, keep its response. Tax records can help show the timing and scale of losses, though calculating damages in these cases is often a separate exercise.
How a claim moves through FINRA
A case begins with a statement of claim filed through FINRA's online portal, along with a filing fee and a signed submission agreement. The firm and any named individuals file an answer, and the parties then select arbitrators by ranking lists that FINRA provides. Document exchange follows FINRA's guidelines, and the hearing is usually less formal than a trial, though it still involves witnesses and evidence. Smaller claims can be decided under a simplified procedure, sometimes on the papers alone. Awards are generally final, and the grounds for challenging one in court are narrow. In a first consultation we review your statements and the story behind the losses, and we discuss whether a claim is worth pursuing in light of costs and what can realistically be recovered.
