FINRA and the benefits of its mediation program


There’s a lot going on in the securities market. Billions of events occur on a daily basis, and hundreds of thousands of brokers make these deals. In that context, you might be thinking its no wonder that fraudulent and otherwise unfair practices occur all the time. Believe it or not, though, the federal government has a non-profit organization meant to protect investors from deceptive and illegal trading practices: the Financial Industry Regulatory Authority (FINRA).

How FINRA helps you

FINRA has many goals. Amongst them are to ensure that advertisements are truthful and accurate and that investors receive basic protection. The organization also strives to ensure that there’s full disclosure before securities transactions occur. It utilizes advanced technology, including artificial intelligence, to catch suspicious activity and investigate it as needed. They also investigate reports of fraud and other bad dealings so that they can take appropriate disciplinary action against those brokers who act poorly.

While that’s all well and good, the truth of the matter is that investors are still wronged all the time. Even in those instances, FINRA plays a role.

FINRA mediations

When you have a complaint against your broker, then you have the ability to enter into mediation through FINRA. This could allow you to avoid the arbitration process, which forces you into some sort of outcome. Before you enter into a FINRA mediation, though, you need to realize that you don’t have to reach an agreement at mediation. If you don’t reach an agreement, then you still have the ability to enter into arbitration, where evidence will be presented and an arbiter will make a decision, or you’ll be able to litigate your case in court.

So, before you sit down for mediation, you might want to keep these issues in mind:

  • What is the full extent of your loss? During mediation, you’re going to be trying to figure out if the other side will pay you compensation and, if so, how much. You need to be equipped with a number and be able to justify it.
  • What’s your evidence? Keep in mind that if you don’t reach resolution at mediation, then you’re going to be in a position where you’re going to have to present evidence, most likely to an arbiter. So carefully consider your evidence and what the outcome might be if you go to arbitration. That might guide you through the mediation.
  • How have similar cases resulted? Although every case involving securities is unique in its own right, you might be able to look at similar cases, even if it’s just based on your attorney’s experience, and get a better sense of your likelihood of success at arbitration. This can help steer you through your mediation and affect your determination of whether a mediated agreement is appropriate.

Receive the legal analysis and advocacy that you deserve

Cases involving broker misconduct can be challenging to resolve. Not only do you need to prove that your broker violated the law, but you also have you prove the full extent of your damages. This can be tricky to do, especially given the fluctuations in the value of securities.

But you don’t have to worry about getting tangled up in the complexities of one of these cases if you choose to work with a skilled legal advocate. Some legal teams, including ours, know the law and can competently apply it to your set of facts to give you a realistic picture of your case and its likelihood of success. If you think that you could benefit from that kind of analysis and would like help handling your FINRA mediation and any subsequent litigation, then now is the time to choose an attorney who is right for you.