Losing your investments to fraud or misconduct is a shock. When you realize a financial professional has betrayed your trust, your first thought is, “How do I get my money back fast?”
You generally have two main choices to seek recovery: arbitration or filing a civil lawsuit in court. The Financial Industry Regulatory Authority (FINRA) oversees most US brokers. Your account agreement often requires you to use their arbitration process for disputes. Deciding whether to use FINRA or go to court is a critical first step that affects the speed and cost of your recovery.
Why arbitration is often the faster path
Most people want a quick resolution, and that is where FINRA arbitration shines.
- Speed: Arbitration cases typically resolve much faster than court lawsuits. While a court case can take years to reach a trial, most FINRA cases that proceed to a hearing typically resolve with an award in approximately 16 months from the initial filing.
- Cost: The process of gathering evidence, called discovery, is more streamlined and limited in arbitration. This can lead to lower legal costs and a faster resolution, especially for less complex claims.
This accelerated timeline is a key advantage when you need to stabilize your financial situation and move past the dispute quickly.
Privacy and the final decision
Arbitration and court also differ in their openness and finality.
- Privacy: Arbitration is a private process. While the final award is publicly available, the hearing itself is not open to the public. Court proceedings, by contrast, are public record.
- Appeals: An arbitration award is final and binding. Grounds for appealing the decision to a court are very limited. A court judgment allows for more appeals, but this can significantly delay your final recovery. You trade the finality of arbitration for the extended uncertainty of a court appeal process.
Because securities laws are complex, you need to choose the path best suited to understanding and proving your specific claim.
Making the right choice
Neither FINRA arbitration nor a court lawsuit promises you a recovery. However, the venue you choose directly impacts your success. In arbitration, a panel of professionals decides your case. The panel consists of a majority of public and typically one nonpublic arbitrator with industry knowledge. In court, a judge or jury of everyday citizens makes the decision.
The choice of forum is a high-stakes, strategic decision. To ensure your case is handled in the place that offers the greatest advantage for your financial recovery, you should seek experienced guidance.
Consider speaking with an attorney specializing in investment fraud to evaluate the facts of your claim and determine the most appropriate venue for getting your assets back.