Disclaimer: By providing the information contained in the web site, Shepherd Smith Edwards & Kantas LTD LLP does not expressly or impliedly agree to provide any legal advice or legal work product to anyone unless a mutually-executed retainer agreement has been signed by this firm and the client. Investors should also note that the statue of limitations for claims against securities brokerage firms and their brokers may bar investor claims which are not filed in a timely fashion. Any investor who thinks he or she may have a claim should file a Complaint in the Judicial Court system or a Statement of Claim in Arbitration as soon as possible.
What Is A Predispute Arbitration Clause?
Virtually every securities brokerage firm will provide you with a standard new account form with a clause that requires you to pursue any grievance through arbitration proceedings instead of the court system.
How Does Arbitration Work?
Arbitration is just like a trial except instead of a judge and jury you get a panel of one to three arbitrators which act as both judge and jury. They hear and weigh the arguments and evidence of both sides of a case, then render a binding decision. The arbitrators generally include at least one “industry” person and two non-industry. This may include accountants, attorneys, sales representatives, bankers, educators, retired judges and other professionals. Unlike court proceedings, arbitration usually doesn’t involve depositions, motions, or appeals. It’s usually much faster and cheaper than civil court. The average length of time is 12 months from filing to first hearing versus more than two years in state or federal court. The arbitration process is explained in detail at the Securities Law website.
Who Conducts The Arbitration Proceedings?
The three main forums for resolving securities arbitration disputes are:
- The American Arbitration Association
- The New York Stock Exchange
- The Financial Industry Regulatory Authority (FINRA)
We recommend using the FINRA forum, it is cheaper and also more consumer friendly.
Where Is The Arbitration Proceeding Held?
How Much Will It Cost To File A Statement Of Claim In An Arbitration Proceeding?
Each forum charges its own filing, administrative and hearing fees. The average filing fee with the FINRA is approximately $1200. The greater the amount of your claim, the greater your filing and administrative fees will be. If the case settles, a portion of this fee may be returned.
What Other Costs Are Involved?
Although our initial consultation is free, you can expect to incur expenses related to preparing a damages exhibit for purposes of mediation and/or arbitration. If the case does not settle (the majority do) then an expert witnesses may have to be retained to testify on your behalf. Though we are essentially experts ourselves, we–as your attorneys–cannot testify. We have retained the services of numerous nationally recognized experts in the securities industry. We also charge a one time “sundry costs” fee for courier and mailing costs, photocopying costs and any other incidental expenses incurred by Shepherd Smith Edwards & Kantas LTD LLP in pursuit of a client’s claim. Other legal fees will be discussed in advance.
How Does Shepherd Smith Edwards & Kantas LTD LLP Set Its Fee?
We work on a contingency fee; if you recover nothing, you pay no legal fees. However, if you do recover your claim or any portion of your claim, you are responsible for paying Shepherd Smith Edwards & Kantas LTD LLP a percentage of the amount recovered.
Can I Work It Out With The Brokerage Firm Without Involving Attorneys?
You can try, but investors who have qualified legal representation consistently do better in arbitration proceedings. If you are going to hire an attorney, do so as soon as possible. DO NOT talk to the brokerage firm except through an attorney. This includes e-mails. Talking to the brokerage firm is one of the biggest mistakes investors make.
I Live Outside The United States. Do I File In My Country Or Where The Brokerage Firm Is Located?
Because of FINRA Rules governing the jurisdiction of brokerage firms, international clients with brokerage accounts with a FINRA registered firm must file arbitration cases in the United States. Shepherd Smith Edwards & Kantas LTD LLP has a lot of experience with international clients, particularly from Latin America.
What Are My Odds Of ''Winning'' A Case?
According to the Securities Arbitration Commentator, a periodical publication which has studied the statistics of securities arbitration cases, 80% of all customer cases settle in favor of the investor prior to the rendering of an arbitration award. Over half of the remaining 20% that do not settle prior to arbitration result in an award to the customer. Shepherd Smith Edwards & Kantas LTD LLP cannot provide assurance that there will be a recovery in any arbitration proceeding. However our decision to accept a case is our belief that it has merit and that some recovery of money is warranted.
Is It Worth All The Time And Trouble?
It’s up to you. Consider that you’ll be asked to come up with copies of your financial records and tax returns. There are also other questions about your background and experience that must be answered. You must decide if you want the broker to get away with his or her conduct and the way he or she treated you.