Justice for Small Investors Using FINRA’s Simplified Arbitration Process

I get just as excited about a $15,000 win by the University of San Francisco School of Law’s Investor Justice Clinic (“IJC”) as I do by a six-figure recovery at my securities law firm.

On October 30, 2017, an arbitrator with the Financial Industry Regulatory Authority (FINRA) awarded $14,750 plus interest to a 63-year-old woman from Lake Forest, California who was invested in a risky and unsuitable investment strategy that involved commodities futures.  Given the small dollar amount involved and the level of effort required to pursue this case, it is doubtful that the customer would’ve been able to afford to hire an experienced securities arbitration lawyer.

FINRA’s Simplified Arbitration Process

The customer’s claim was administered through FINRA’s simplified arbitration procedures which is available to customers who seek damages that are less than $50,000.   Simplified arbitration allows claimants to have their case heard by a single arbitrator through a less costly and time consuming process that does not require an in-person hearing.  For claims between $25,000.01 to $50,000, the FINRA filing fee is $600; and, for claims between $10,000.01 to $25,000 is $425.  However, the arbitrator has the discretion to waive the filing fee based upon a showing of financial hardship.

Although simplified arbitration can be quicker and cheaper, it may not be the best option for all investors–especially when the opportunity to conduct extensive discovery or provide oral testimony and argument at the hearing are necessary.

About the Investor Justice Clinic

The IJC helps financial consumers recover investment losses from their stockbroker or investment advisor.  The IJC provides free legal assistance to investors who file securities arbitration claims before FINRA. To qualify, clients must have a family income less than $75,000/year and have suffered less than $50,000 in losses.   The IJC’s qualification criteria may be waived in exceptional circumstances such as when an investor cannot obtain legal representation.

Investors who have a potential claim should seek legal assistance without delay.  Click here for the IJC website.   Please note that IJC students may be unavailable to work on new and existing cases during the winter recess.

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