Frequently Asked Questions

ARBITRATION PROCEDURE
   
Securities Arbitration Procedure - Frequently Asked Questions

Q. Where can I sue my broker to recover my losses?(To learn more click here)

Q. What happens in an arbitration proceeding? (To learn more click here)

Q. What does all of this cost? (To learn more click here)

Q. What are the chances that I will recover some or all of my losses?(To learn more click here)

Q. Won't regulatory authorities like the SEC and the NASD help me recover my losses so I can avoid arbitration?(To learn more click here)

Q. Will the broker or brokerage firm reimburse me for my losses if I complain or threaten to sue them? (To learn more click here)

Q. How long do I have to bring my claims?(To learn more click here)

Q. Where can I sue my broker to recover my losses?

A. Most suits against brokers must be brought in arbitration before the National Association of Securities Dealers (NASD). This is because most Client Agreements between brokerage firms and their customers provide for mandatory arbitration. If you did not sign such an agreement, you could bring your case in state court or under certain circumstances in federal court. After reviewing your case, Mr. Giffin will give you his recommendation where he believes it should be filed.

Q. What happens in an arbitration proceeding?

A. The case begins with the filing of a Statement of Claim, which is a document that spells out the nature of the alleged wrongdoing and the amount of compensation you are seeking. The broker and the brokerage firm have 45 days from the date they receive the Statement of Claim to file their written Response. The parties will then exchange documents. You'll be required to produce tax returns, account records from any account you might have had at another firm and any correspondence or notes you might have of conversations with the broker. The Respondents will be required to produce their internal compliance rules and procedures, account statements and confirmations, commission records, any correspondence or notes they have of conversations with you and any documents concerning prior problems with the broker or the securities you bought.

The parties will then select a three-person arbitration panel from lists provided by the NASD. The panel will consist of one industry arbitrator and two public arbitrators. One of the three arbitrators will be selected as chairperson and will thereafter be responsible for running the hearings and making certain types of rulings on behalf of the panel.

Once the arbitrators are selected they will hold a telephone conference for the selection of a hearing date. The hearing is generally 9 to 11 months after your Statement of Claim has been filed.  During this time, we will be preparing your case by reviewing documents, meeting with you, and other witnesses having knowledge of the case and our expert and preparing exhibits. Approximately a month before the hearing we will have a number of extensive meetings with you to help you prepare to testify at the hearing. At the conclusion of the hearing, the arbitrators will confer to arrive at a decision. The decision, called an Award, will be issued to the parties in writing and will likely be final. With rare exception, there is no appeal from an arbitration award.

Q. What does all of this cost?

A. There is a filing fee that has to be paid at the time the Statement of Claim is filed which is based on the amount of money you are requesting. There is also a deposit for hearing sessions that must be paid when the Statement of Claim is filed. There is also a charge for each of the hearing sessions. Generally the arbitrators decide in their award who will pay for these fees.

Q. What are the chances that I will recover some or all of my losses?

A. While no one can provide assurance that you will recover anything, your chances of recovering at least some of your losses are very good. The majority of cases settle before Hearing. Of the cases that don't settle, approximately 55-60% result in an award to the investor, though not necessarily for the full amount requested. You should bear in mind that if Mr. Giffin agrees to handle your case, it means he believes it has merit and that you have a good chance of recovering.

Q. Won't regulatory authorities like the SEC and the NASD help me recover my losses so I can avoid arbitration?

A. No. Government agencies and regulatory authorities generally cannot help individual investors to recover their losses.

Q. Will the broker or brokerage firm reimburse me for my losses if I complain or threaten to sue them?

A. Your chances of persuading a brokerage firm to voluntarily refund your losses are very small. The brokerage firm will almost always claim that the losses were your fault rather than theirs. The strategy of most brokerage firms faced with complaining customers is to brush them off and hope they give up without a fight. Brokerage firms follow this approach because, unfortunately, the vast majority of customers do give up without a fight.

Q. How long do I have to bring my claims?

A. That depends upon the nature of your of claim and the state in which the events occurred. Statutes of limitation apply to securities claims. Certain types of claims might be extinguished in as little as one year, while other claims might survive for longer periods. However, once the time limit has run, the affected claim may be gone for good. Additionally, claims arising out of transactions over six years old are not eligable for arbitration before the NASD. If you suspect that there may have been wrongdoing in your investment account you should consult an experienced securities arbitration lawyer as soon as possible.

Reggie C. Giffin, P.C.
200 NW 47th Street
Kansas City, Missouri 64116
Telephone: (816) 453-2253
Cell: (816) 588-6596
Fax: (816) 453-2496
Email: rgiffin@kc.rr.com

Contact us about your legal matter today!