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General Information about Securities Arbitration with FINRA

Written by: Robert Kevin Savage

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Arbitration

Posted almost 3 years ago. 1 helpful vote, 0 comments

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How long does it take to complete arbitration?

In the current environment, the usual arbitration case is resolved within 12 to 15 months of filing. Of course, as the volume of arbitrations filed increases or decreases the usual time period may vary. Many arbitration claims will have the opportunity to settle so any specific case may actual resolve in a shorter time frame. The facts of a specific case will control how long it takes a law firm to draft the Statement of Claim but most can be filed within 3 weeks to two months depending on the complexity of the account and the allegations of wrongdoing. It is not unusual for a law firm to invest 150 hours or more preparing and presenting an arbitration case.

What expenses are involved in the typical arbitration?

1. Filing Fees. These fees are set by the Financial Industry Regulatory Authority (FINRA) on a sliding scale. For example, a claim for losses of $50,000 will have a filing fee of $600 and a claim for $1,000,000 of losses will have a filing fee of $1,575. All of these fees are set by FINRA and so they can change them at their convenience.

What other expenses?

2. Hearing Fees. FINRA arbitrations have set fees for each hearing session. FINRA defines ‘session’ as a up to four-hours of meeting but even if the meeting does not take all that time you will likely be charged for your portion of the meeting. FINRA charges $450 per session for a pre-hearing session with one arbitrator and a session with the entire panel of arbitrators can be as high as $1,200. Although the arbitration panel can assign arbitration fees when they make their decision it is possible that the fees are split or assigned to one side or the other. The Savage Law Firm, P.A. always requests reimbursement of your costs, expenses, and attorney and hearing fees. It is fairly normal for the arbitrators to assess the fees against the broker dealer or split them between the broker dealer and you. Of course the arbitrators can also assign the costs to you if they decide in favor of the broker dealer and/or believes that a claim is frivolous and unfounded. As an example, if th

What other expenses?

3. Other Expenses. The cost of experts can range depending on what type of expert or experts are needed. A damages calculation is normally needed at the beginning of the case and that can cost anywhere from about $1,500 to $3,500 or more depending on the complexity of the trading activity and the time necessary to analyze it. There are normally costs for copying, overnight mail, etc. If experts are needed to testify they will usually charge a daily rate of about $1,500 to $2,500 per day.