How a FINRA Attorney Can Help You Recover Investment Losses

The Financial Industry Regulatory Authority (FINRA) was created by law to regulate financial advisors in the U.S. and provide rules of conduct to define ethical practices. One of the first rules that any financial advisor is taught is FINRA Rule 2010, “A member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principals of trade>

When disputes arise between investors and their brokers or brokerage firms, FINRA arbitration offers a path that avoids the lengthy and costly court procedures.

In this guide, we’ll explore how skilled FINRA arbitration lawyers navigate this complex process to help investors recover losses and secure fair outcomes. With their deep understanding of securities laws and arbitration mechanics, a skilled arbitration lawyer is your best ally in resolving financial disputes and securing your investments.

What is FINRA Arbitration?

FINRA, or the Financial Industry Regulatory Authority, is a private, non-profit organization authorized by Congress to act as a self-regulatory body for the U.S. securities industry. Its primary role is to ensure that brokerage firms and their brokers operate fairly and honestly, enforcing rules, overseeing markets and ensuring compliance. When disputes arise, FINRA arbitration offers an alternative to traditional litigation.

The arbitration process starts with an investor filing a Statement of Claim against their broker or brokerage firm for alleged misconduct. After selecting arbitrators from a FINRA-provided list, a hearing takes place where both parties present their cases. The arbitrators’ decision, typically rendered within 30 days after the final evidentiary hearing in arbitration, is binding and has limited appeal options, emphasizing the process’s finality.

FINRA arbitration is generally less costly and quicker than court litigation — usually 12 to 18 months from the start to an arbitration evidentiary hearing — and a less formal procedure. The relaxed rules of evidence and direct progression to discovery after initial filings make it a less intimidating and more accessible option for many investors looking to resolve disputes efficiently.

The Role of a FINRA Arbitration Lawyer

A FINRA arbitration lawyer is critical in representing investors who have suffered losses due to broker misconduct or negligence. Initially, the lawyer thoroughly reviews the investor’s case, examining account statements, broker communications and the investor’s financial objectives, circumstances, needs and risk tolerance (and other factors) to determine if there is a viable claim. This detailed evaluation is essential to establishing whether the broker’s actions directly contributed to the investor’s losses beyond typical market risks.

Upon confirming a viable case, the lawyer prepares by gathering necessary evidence and drafting a Statement of Claim, formally outlining the investor’s grievances. This document is crucial as it sets the foundation for the arbitration proceedings. After the Statement of Claim is filed, the Respondent financial advisor firm has 45 days after service of the claim to file an “Answer,” outlining its response and any defenses to the Statement of Claim. Then, after the parties choose arbitrators from a list provided by FINRA, the parties are free to engage in “discovery,” a process where the parties can request documents and information from the other party. And, they must produce a list of documents that are mandated to be produced by FINRA without any further request. There are no depositions absent in a large case where the arbitrators grant depositions, but that is very rare. The parties will also have a telephone hearing where the arbitrators and the parties choose a definitive date for the final hearing, an evidentiary trial where each party can present evidence, claims and defenses, including fact witnesses, documentary evidence, and expert witnesses. Each side can make an opening statement, present witnesses, and also cross examine witnesses. The arbitrators may ask questions as well. When all the evidence has been presented, then each side will traditionally make closing arguments, after which the arbitrators will privately meet, and render a decision. The arbitration award decision is sent to FINRA, which types up the award and has the three arbitrators (in smaller cases, one arbitrator) sign the arbitrator award and send it to the parties within 30 days after the decision is made. 

Sometimes, just prior to the final hearing in arbitration, the parties will voluntarily meet for a “mediation,” which is a nonbinding settlement conference that is run by a “mediator”. The job of the mediator is to try to get the parties to voluntarily agree to resolve the case without having a final hearing in arbitration. If the parties agree, then they sign a settlement agreement, after which the claimant is normally paid a sum of money. Cases are sometimes resolved in mediation because the mediator convinces both parties to make a business decision to resolve the case and avoid the uncertainties of having three arbitrators decide the case after a final evidentiary hearing in arbitration. No one can predict the outcome of any case. So a large number of cases are resolved via mediation. But no party is required to mediate or settle their case.

So, an experienced FINRA arbitrator knows how to conduct a mediation and negotiate a settlement before the case reaches an evidentiary hearing. These negotiations aim to secure a satisfactory resolution for the client without the time and expense of a formal hearing, leveraging the lawyer’s understanding of securities laws and arbitration strategies.

If negotiations do not result in a settlement, the lawyer will represent the investor at the arbitration hearing, present evidence, cross-examine witnesses and advocate for the investor’s right to compensation. This comprehensive approach ensures the investor’s interests are vigorously represented throughout the arbitration process.

Why Choose a FINRA Arbitration Lawyer?

FINRA arbitration lawyers are experienced in securities law and adept at navigating the complexities of arbitration processes, making them necessary for investors seeking to recover losses due to broker misconduct or negligence. These attorneys are knowledgeable about regulations and precedents and skilled at presenting evidence and advocating effectively for their client’s rights. Their expertise is particularly valuable in disputes involving complex financial products or significant financial losses.

The arbitration process is generally faster, less formal and incurs lower expenses than court. When selecting a FINRA arbitration lawyer, look for qualifications such as a strong track record in securities litigation, a deep understanding of arbitration rules and a commitment to investor advocacy. It’s important to ask potential lawyers about their experience with similar cases and their approach to arbitration during initial consultations.

At Sonn Law Group, our attorneys, led by Jeffrey R. Sonn, Esq., have extensive experience securing fair outcomes for investors through negotiated settlements and arbitration hearings. Our firm’s commitment to protecting investors and our successful litigation track record make us a trusted choice for handling complex securities disputes.

Frequently Asked Questions 

Does Sonn Law Group primarily focus on securities law?

Yes, Sonn Law Group’s attorneys regularly practice securities fraud law, having successfully helped thousands of clients in FINRA arbitration cases for almost four decades. This focus equips them with an acute understanding of the securities industry and an adeptness at navigating the complexities of FINRA’s arbitration processes.

Our website is updated with frequently asked questions and important news for investors. This commitment to justice for wronged investors makes our firm a solid choice for FINRA arbitration representation.

What is Sonn Law Group’s reputation in handling FINRA arbitration?

Sonn Law Group was founded by Jeffrey Sonn, who has over 30 years of experience in securities arbitration. He has represented investors in some of the most infamous investment fraud cases and has recovered hundreds of millions for his clients. Over his career, Jeff has earned the following notable accolades and awards, among others:

• Rated by Super Lawyers, 2017-2024
• Lawdragon 500 Leading Plaintiff Financial Lawyers, 2022-203
• AV Preeminent® Peer Rated for Highest Level of Professional Excellence by Martindale-Hubbell®, 2023
• Lifetime Member, Million Dollar Advocates Forum
• Lifetime Member, Multi-Million Dollar Advocates Forum
• Top 100 Attorneys in Florida by National Trial Lawyers

The firm is known for its thorough representation and commitment to securing justice for investors. It consistently recovers significant amounts for clients. We encourage you to learn more about Jeff Sonn’s career in securities law and the rest of our team of talented attorneys.

Can Sonn Law Group handle cases similar to mine?

Sonn Law Group has extensive experience handling various claims, from broker negligence and fraud, breach of fiduciary duty, unsuitable investments, unauthorized trading, theft and forgery. The firm’s lawyers have encountered nearly every type of broker and advisor misconduct and are well-suited to address disputes involving a wide range of investment products.

What is Sonn Law Group’s track record?

Sonn Law Group prides itself on a long history of successful outcomes. For example, in November 2017, Jeffrey Sonn wrote an article stating that there were signs that the Woodbridge Group of Companies may be nothing more than a Ponzi scheme. In late December of the same year, the SEC charged Woodbridge with a $1.2 billion Ponzi scheme, and the Sonn Law Group became part of the executive committee of class action lawyers that helped secure a $54.2 Million recovery in late 2021 for Woodbridge Group investors. In a FINRA arbitration case, we won $11.1 million for a client who had lost $1 million in investments and was saddled with a $10 million loan judgment caused by the financial advisor. Jeffrey Sonn acted as the sole lead trial attorney and won the case.

Our firm’s attorneys have obtained substantial financial recoveries for clients, demonstrating their proficiency and effectiveness in arbitration.

Does Sonn Law Group guarantee winning my case?

No attorney can guarantee a win, and if they do, stay away from that attorney. Sonn Law Group’s attorneys provide realistic assessments of each case, ensuring that clients clearly understand what they can expect from the FINRA arbitration process. But no one can predict the outcome of any FINRA arbitration case.

Is Sonn Law Group passionate about their work?

Your claim is far too important to give to someone who is just punching the clock. Sonn Law Group takes tremendous pride in what we do. Our team is committed to fighting for investors’ legal rights and best interests. We are passionate about helping people protect their hard-earned income and life savings from bad-acting financial advisors, brokers and brokerage firms. When investors lose money because of intentional misconduct or negligence, our FINRA lawyers advocate fiercely, helping them fight for every penny they rightfully deserve.

Does Sonn Law Group offer a free consultation to discuss my FINRA case?

Yes, Sonn Law Group provides a free consultation to discuss the details of potential cases. This initial consultation helps you understand your rights, evaluate your case and determine if Sonn Law’s attorneys fit your needs.

Resolve Your FINRA Arbitration Dispute With Sonn Law Group

When faced with substantial investment losses that require FINRA arbitration, it’s important to work with experts who understand the intricacies of securities law.

Sonn Law Group is here to help you understand your rights and explore your legal options for recovery. With over 36 years of FINRA arbitration and court litigation expertise, our attorneys are well-prepared to guide you through recovering your investments.

Sonn Law Group is ready to protect your interests and pursue justice on your behalf. Contact us to schedule a free, no-obligation consultation.