FINRA's New Specialized Arbitration Claims for Cases Under $50,000

Recently, FINRA has begun to hear specialized arbitration claims for cases that have a value of $50,000 of less. This is a major shift in the prior trend of cases that FINRA traditionally heard, which makes their resolution process more accessible to claimants both physically and financially. The FINRA Code of Arbitration, Rule 12800, governs the process. If you have a potential FINRA Arbitration dispute that did not meet the prior financial requirements, it is highly recommended that you consider the information below:

When FINRA issued its decision, they indicated that the Code of Arbitration Procedure for Customer Disputes (Customer Code) and the Code of Arbitration Procedure for Industry Disputes (Industry Code, and together with the Customer Code, the Codes) establish two options for proceeding with cases that involve $50,000 or less, excluding interest and expenses. The first viable option is a decision by one single arbitrator based on the parties' pleadings and other supplemental material submitted by the parties. The potential second alternative is a full hearing with one single arbitrator. According to both the Customer Code and the Industry Code, a claimant may request a hearing. When and if such a hearing is requested, it is typically held in person and there are no limits on the number of sessions that can take place to settle the dispute.

There is now an option to have a Special Proceeding that is still subject to the regular provisions of the Codes that govern prehearings and hearings. The objective behind the Special Proceeding is that there are limitations that ensure a convenient and potentially more cost-effective option that is less demanding than a traditional hearing. Some examples of the conditions are: the hearing is held by telephone unless the parties agree to another form of appearance, there is a time limit of two hours for claimants to present their cases and half hour for any rebuttal and closing statement not including questions from the arbitrator and responses to their questions, Special Hearings are not permitted to exceed two hearing sessions, and the parties will not be permitted to question the opposing parties' witnesses.

If you or someone in your family has a dispute that requires FINRA arbitration in an amount that is less than $50,000, it is highly recommended to speak with an attorney to explore potential recovery of your lost investment capital through FINRA arbitration. Silver Law Group is a securities and investment fraud law firm that is recognized nationwide for its success with helping investors recover their funds lost from misconduct of brokerage firms. Silver Law Group is dedicated to representing the interests of investors who have been victims of investor fraud and to help those investors recover the capital that they have lost. According to the rules set out in the securities industry, there is a possibility to recover using FINRA arbitration. Our firm represents investors looking to recover in FINRA arbitration claims both in amounts under and in excess of $50,000. The entire recovery process on a contingency fee basis. If you have questions regarding your potential for recovery or legal rights, please contact Scott Silver or the Silver Law Group for a complimentary consultation at ssilver@silverlaw.com or toll-free at (800) 975-4345.