Justice is blind ( ... or maybe not )Ladies and gentlemen, FINRA arbitration is a situation that all investors want to avoid.  By its very name investors should know that this is an industry designed system of justice set up to protect the brokerage firms at all costs and at the same time ensure the silence of all participants. It is no mistake that very few news stories focus on securities industry fraud cases.  Please understand the Financial Industry Regulatory Authority (FINRA), formerly the National Association Of Securities Dealers, has a lot of political power and a lot of practice dealing with their broker fraud.

Here are some facts every investor needs to know when opening an account in the securities industry:

1.  By signing an opening account form at a brokerage firm every investor waives his or her right to a trial by a jury of peers.  This may seem unimportant at the time of signing, but if you become a victim of fraud you will quickly understand how these firms protect themselves. We have dealt with the FINRA Arbitration process on two separate occasions. We have watched in total amazement how our very own securities lawyers worked harder at protecting the offending brokerage firms than they did at exposing their fraudulent practices. It is a very corrupt system!

2.  FINRA registered brokerage firms are NOT REQUIRED to carry insurance for their own errors and ommissions. The FINRA arbitration system is all the insurance a brokerage firm needs when dealing with any dispute.

3.   No matter what lifelong experience level you have investing within the securities industry, all investors are classified as ” Sophisticated Investors ” in the eyes of FINRA and their lawyers. Suitability is one of the largest complaints FINRA receives. Any investment or strategy recommended must coincide with the INVESTOR’S OBJECTIVES  ( OR )  FINANCIAL SITUATION  ( OR )   RISK TOLERANCE. Unfortunately,  FINRA allows these investment parameters to be decided at the discretion of your Broker/ Advisor. PLEASE BE AWARE at all times, because if your financial situation is considered good your objectives and risk tolerance may not be considered relevant.

4.   If your Broker/ Advisor or their firm lies to you or misrepresents an investment product or strategy and you incur damages, FINRA considers those damages nothing more than a lost opportunity caused by your lack of due diligence.

5.   Lies or misrepresentations by a broker/ Advisor are considered nothing more than a Civil Crime with no possibility of any prosecution.

6.   If you have a problem with your investment firm, finding a securities lawyer for a fraud case is a very expensive process and these brokerage firms know it. The reason it’s so expensive is because the chance of recovering any of your money is extremely limited. Always seek out a PLANTIFF’S ONLY attorney. These attorneys can be located through the website www.piaba.org/find-attorney.

7.   Please don’t be fooled by any securities lawyer that tells you they will take your case on a straight contingency basis. There are always fees to be paid for their administrative costs as well as expert witness fees and even filing fees to FINRA  ( Everyone wins but the investor. ) Also, don’t ever be persuaded by a securities lawyer into allowing any kind of LOSER PAYS clause to be placed into your arbitration claim. This clause could leave you, the claimant, on the hook for all parties legal fees incurred during the arbitration process if you do not prevail in your case.  (If your Securities Lawyer insists on a Loser Pays clause immediately contact Investor Protector.)

8.   It takes approximately 18 months to have your case heard in front of a FINRA arbitration panel.  In that time frame you will go through a “Discovery Process.” This is where you will wish you either audio taped your Broker/ Advisor or you never signed that opening account form.

9.   The “Discovery Process” is an insult to any justice system. The investor must turn over any and all documents pertinent to their complete investment and working life including tax returns, while the offending broker and brokerage firm have the self imposed right to what is called “Limited Discovery.” THEY DON’T HAVE TO TURN OVER MUCH OF ANYTHING!  (What this means is that your Broker/Advisor and his or her firm may have numerous complaints against them as well as a pattern of disceptive behavior and this information may never be disclosed because they have paid to have it expunged from FINRA records.)

10.   During the “Discovery Process” the brokerage firm will launch a character assassination against you (the claimant) that would rival any tabloid publication, while the S.E.C., FINRA and state regulators do nothing to assist you.

11.   No depositions of the offending Broker/ Advisor or brokerage firm’s employees can be taken by the claimant’s attorney for later use in the FINRA arbitration hearing.

12.   Polygraph tests are not admissible in the FINRA arbitration process.

13.  Falsified and Forged documents are considered nothing more than circumstantial evidence.

14.  The arbitration panel typically consists of  three people:  Two public arbitrators chosen from a FINRA arbitrators list and One person from the securities industry. The panel of arbitrators will typically include arbitrators who were or are now affiliated with the securities industry. ( Does that describe a jury of your peers?)

15.   The rule of law does not apply in FINRA arbitration. I repeat ” THE RULE OF LAW DOES NOT APPLY IN FINRA ARBITRATION! ” ( Investors what this means is you will see documents you have never seen before and you will hear testimony that is no where near the truth! )

16.   Securities regulators do not and cannot monitor FINRA arbitration proceedings.

17.   FINRA arbitrators can rule in any manner they choose and without explanation. The panel of arbitrators’ decision is not required to include factual findings or legal reasoning and any party’s right to appeal or seek modification of their ruling is severally limited. They can even force all of the costs of the arbitration on to the claimant. This can add up into the tens of thousands of dollars.

Certainly by now any logical person can see how slanted their system of justice truly is.  But wait there is one more card hidden up the industry’s sleeve.  After being allowed to experience all of their lies and deceptions, the industry will ensure your silence by forcing you to sign confidentiality agreements.  Investor Protector is going to educate all investors on how to level the playing field and avoid the incredibly corrupt FINRA arbitration process.