What are the steps in a FINRA arbitration?
To start an arbitration, the investor (known as the claimant), usually through a lawyer, files a Statement of Claim and other papers with FINRA. This document is similar to a complaint that is filed in court, although it is sometimes less formally worded. Typically, the Statement of Claim contains a brief summary of what the claimant says that the brokerage firm did wrong, a summary of the legal theories on which the claimant hopes to base a recovery, and a demand for monetary and other relief. FINRA then serves the claim on the stock brokers or financial advisors (known as the respondents) that are being sued. Respondents then file an Answer to the claim, which usually denies responsibility for the conduct and losses described in the Statement of Claim. About 90 days after the filing of the Statement of Claim, the attorneys receive three lists of eight, or a total of twenty-four, potential arbitrators. Each side ranks and strikes the names on the lists, based upon their knowledge of a
