FINRA Arbitration - Transcript

FINRA arbitration is a process designed to resolve disputes between investors, brokerage firms, and financial professionals. This forum offers an alternative to traditional courtroom litigation, providing a more streamlined and cost-effective way to address grievances. However, the claims brought to FINRA arbitration often involve complex issues that require experienced representation to navigate effectively. At Malecki Law, we have extensive experience representing both public investors and industry professionals in FINRA arbitration cases.

Public investors frequently file claims in FINRA arbitration to address a variety of grievances. These claims typically include:

• Reg BI (Regulation Best Interest): Allegations that a broker recommended investments inconsistent with the investor’s financial goals, risk tolerance, experience, and best interest.
• Breach of Fiduciary Duty: Claims that a broker acted in their own interest rather than prioritizing the client’s needs.
• Theft and Fraud: Instances of stolen funds or deceptive practices aimed at manipulating an investor.
• Omissions and Misrepresentations: Failing to disclose crucial information or providing false information about an investment.
• Churning: Excessive trading in an account to generate commissions for the broker.
• Defective Securities Products: Selling investments that are inherently flawed or misrepresented.

While these issues often arise from a breakdown in trust, they can have severe financial consequences for investors. Unfortunately, many investors hesitate to bring claims against brokers they consider friends, which can perpetuate harmful practices.

FINRA arbitration is not limited to public investors. Industry professionals also rely on this forum to resolve disputes. Common claims include:

• Wrongful Termination: Allegations of unjust dismissal from a brokerage firm.
• Discrimination Claims: Cases involving race, gender, or age discrimination, provided both parties agree to arbitration.
• Expungement Requests: Efforts to remove inaccurate or unjust customer complaints or termination language from a professional’s record.
• Intra-Industry Disputes: Conflicts related to transitions between firms, such as allegations of "raiding" or client-stealing.

These claims can significantly impact a professional’s reputation and career, making it critical to address them promptly and effectively. Contacting trusted, experienced securities attorneys like the lawyers at Malecki Law in New York are crucial to successfully handling your case.

A recurring theme in FINRA arbitration cases is the failure to supervise. Brokerage firms have a legal obligation to monitor their representatives and ensure compliance with securities laws and regulations. When firms neglect this responsibility, they can be held liable for the actions of their employees.

For example, if a broker engages in fraudulent activities and the firm fails to detect or prevent this behavior, the firm may face claims for failure to supervise. These claims aim to hold firms accountable for systemic issues that allow misconduct to occur.

FINRA arbitration may be required when bringing a claim. There are several advantages to FINRA arbitration over traditional litigation, including:

• Efficiency: Cases typically resolve faster than court proceedings.
• Cost-Effectiveness: Lower costs make arbitration accessible to a wider range of parties.
• Expert Decision-Makers: Arbitrators with industry knowledge can provide informed rulings.

However, the process also has its challenges, including limited discovery and binding decisions that leave little room for appeal. Navigating these complexities requires skilled advocacy.

Whether you are a public investor seeking to recover losses or an industry professional protecting your reputation, Malecki Law can provide the guidance and representation you need. Our experienced attorneys understand the nuances of FINRA arbitration and have a proven track record of securing favorable outcomes for our clients. Contact Malecki Law at (212) 943-1233 or connect with us online to discuss your case. With the right legal support, you can protect your financial future and achieve the resolution you deserve.

Transcript:

The top customer claims for public investors are unsuitability, breach of fiduciary duty, theft, fraud, omissions, churning, defective securities products. These are all things that happen in the typical relationship with a broker that’s not being honest.

It could even be negligence a lot of people feel uncomfortable bringing claims against the broker that they felt was their friend’s friend over the years.

You know but there can be negligence and they’re brought generally as failure to supervise claims against the broker dealer not against the broker themselves although it does go on their permanent record.

For investment professionals the typical FINRA claims are wrongful termination, there’s also you can bring discrimination claims if both parties agree race gender age discrimination and those types of cases you can bring claims for expungement to remove a customer complaint or a negative termination language that you think is untruthful.

So these are typical claims and then of course there’s also intra-industry claims relating to transitions from broker dealer to broker-dealer, uh rating as they call it you know stealing customers one broker dealer to another, those are the typical claims in FINRA arbitration for investors and industry professionals.