Arbitration: When you first opened your investment account, you most likely signed an arbitration agreement, which requires any claims you bring to be resolved in an arbitration form. You are precluded from filing a lawsuit in a court of law. Arbitration vs. Court: In a lawsuit filed in the court system, you are entitled to have your case decided by a jury. You are entitled to have full discovery and take depositions of potential witnesses. You would also have to submit to a deposition yourself, and respond to more invasive discovery than is normally allowed in arbitration. The benefits of arbitration are lower case expenses, it is less formal than court, and the length of time that passes before your case is resolved is usually less than the time it takes to finalize a lawsuit. A downside of arbitration is that discovery is somewhat limited. The most negative aspect of arbitration is that arbitrators are less likely to give you all the damages that a jury might consider. FINRA: The arbitration forum we use most often is through the Financial Industry Regulatory Authority which is the self-regulatory body that controls registered brokerage firms |
