If you have a dispute with your stockbroker, investment advisor or their firm, you may be able to resolve that dispute outside of filing a court action. Arbitration is less expensive than litigation and will also take less time to receive a decision. Most arbitration claims are filed with the Financial Industry Regulatory Authority (FINRA) Dispute Resolution, Inc. The remaining claims are filed with the exchanges; an example of an exchange is the New York Stock Exchange. After you make your request arbitration, your case is assigned to an arbitrator to make a determination of any wrongdoing and whether or not there is compensation to be awarded. You cannot appeal the decision of an arbitrator; however, under limited circumstances the arbitrator’s decision may be challenged. Most brokerage account agreements contain a clause requiring you to settle any disputes through arbitration in lieu of the court.
When you discover a wrongdoing has occurred, you should consult with a securities attorney to determine your legal rights in order to recover funds or what type of remedy is available to you. The federal and state securities laws outline a statute of limitation which will limit the amount of time you have to request arbitration or file a securities action.