Securities Mediation

Securities mediation is a pre-hearing/pre-trial dispute resolution process which provides aggrieved investors the opportunity to control the outcome of their dispute before it is decided by a judge or arbitration panel. Securities mediation is a popular method to resolve securities disputes with brokerage firms and/or financial advisors. Our lawyers have extensive experience representing investors in FINRA mediations and court-ordered mediations

Mediation is an informal, voluntary, and non-binding process where each party has a chance to tell their story to an impartial and neutral mediator. Mediation allows the parties a great deal of control in the process by allowing them to select a mutually agreeable mediator who is knowledgeable about securities disputes.

Unlike a judge, though, a mediator has no actual authority. If, at the end of a mediation conference, any party refuses to enter into a settlement or accept a mediator’s proposal, there is no obligation to settle the dispute, and the arbitration or lawsuit will continue without any disclosure that either side was willing to settle the claims. Further, when a mediation is unsuccessful, the discussions are kept confidential. However, if the mediation is successful, the client avoids the risks of litigation and arbitration as well as the costs associated therewith.

In the mediation process both parties in the dispute control:

• the selection of the mediator;
• time and location mediation session occurs; and
• the terms under which dispute is resolved.

In addition, mediation can be more expedient and less costly than arbitration or litigation. Further, if the parties agree to mediate, neither side gives up the right to litigate or arbitrate at a later time, regardless of the outcome of the mediation.

Mediators frequently highlight how litigation or arbitration can be costly, contentious, and uncertain as to the outcome. Financial Industry Regulatory Authority (FINRA) statistics demonstrate that a large number of cases that mediate are resolved at mediation. Through creative and aggressive strategies, our lawyers have made the most for our clients with the opportunity to mediate and have guided those clients to quick, satisfying, and cost-effective resolutions to their securities disputes. According to FINRA, “the mediation program has achieved an 80% success rate — parties who mediate in the forum resolve four out of every five cases.”

Mediation is informal in nature, and it requires a skillful mediator. The mediator is selected by both parties and usually has a skillset or knowledge specific to the issues in the case. The mediator’s job is one thing: to take into account the facts of the case and guide the parties toward resolution. In doing so, the mediator will, over the course of a day, go back and forth between the parties to define the issues in dispute, weighing both sides’ positions and weaknesses in those positions, and eventually come up with what he or she believes is a fair solution to the dispute. The mediator may also discuss with both parties what he or she believes the probable outcome of the case if was to go to a final hearing.

A mediation often begins with the mediator introducing himself or herself to both parties. The mediator will then set the rules of engagement and the agenda for the day. The attorneys for both sides will then making an opening argument of sorts aimed at the opposing party and mediator to help define core issues and positions of the case. After the joint session, the two parties then move to separate rooms. The mediator then bounces back and forth from each separate room carrying messages, offers, counteroffers, questions, demands and proposals in order to bring both sides closer to resolution. The mediator will not disclose information either party deems confidential.

The mediator has no authority to decide the outcome of the mediation process or even compel the parties to resolve the dispute. Until the parties come to an agreement, mediation is non-binding and either party can walk away. If the dispute is not resolved, the aggrieved investor has preserved the right to pursue arbitration.

Silver Law Group and its attorneys have extensive experience seeking and recovering losses through securities mediation. Our attorneys can help you determine whether securities mediation is an effective way to resolve disputes between investors and brokerage firms and their financial advisors. If an investor suffers losses as a result of any FINRA sales practice violations or any other securities misconduct, he or she may be able recover losses in a FINRA arbitration claim.