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How to File a FINRA Arbitration Statement of Claim

No one wants to find themselves in a legal dispute, especially not with their stockbroker. When you invest your hard-earned money, you want to be sure that you are working with someone you trust. The last thing you want is to find out you have been a victim of misrepresentation or fraud. People make investments for the purpose of becoming financially secure now and throughout their retirement years. You didn’t hire a wealth manager or make investments so that you could end up in court or arbitration—spending your money on legal bills instead of your retirement dreams. Nevertheless, in investments, as in all of life, things can go wrong. And if they do, you need to know where to turn and what you can do to rectify the situation. If you think you have been a victim of securities fraud, it is time to consider FINRA arbitration.

Whether you are a new or experienced investor, FINRA arbitration is probably uncharted waters for you. You may not be aware of this unless you read your contracts very closely before you sign them—but nearly every investment contract and brokerage agreement contain an arbitration agreement. What does this mean? It means that almost every dispute you have with a broker is likely to be decided in arbitration. But fear not, this is not necessarily a bad thing! FINRA arbitration can be much faster and less expensive than the slowly grinding wheels of the civil court process. But unless you are intimately familiar with the process, you will need an experienced securities lawyer to guide you through the process. And one of the most important areas where you need to know what you are doing is at the beginning. In other words, you need to know how to get the process started. Our team at Kurta Law has the experience and know-how to walk you through filing a FINRA statement of claim and kicking off the FINRA arbitration process.

What Is a FINRA Statement of Claim?

The FINRA arbitration process begins when you file a statement of claim for arbitration with the Financial Industry Regulatory Authority (FINRA). A FINRA statement of claim is similar to an initial complaint in the civil court process. It is the foundational document in FINRA arbitration. A FINRA statement of claim tells your side of the story about the way your broker or brokerage firm harmed or defrauded you.

A statement of claim will lay out all the facts of your case. You will need to state all of the facts that are important to your claim against your broker, including details, dates, names, and any other relevant information. If you do not state all of the relevant facts, you may not be able to bring them up or add them at a later date. In other words, if you fail to state facts that are relevant to your case, you may waive your right to address them later. 

Your FINRA arbitration statement of claim also needs to state what remedies you are requesting. In other words, the court needs to know what you want them to do about the wrongs that were perpetrated against you that caused you harm. Remedies are the means by which you are made whole. For example, if you think that your broker engaged in excessive trading in your account, you could request that the arbitration panel award you reimbursement for any losses due to those excessive trades. The court or arbitration panel does not want to be left guessing, so you will need to be reasonably specific about what remedies you are seeking. 

What Does Filing a FINRA Statement of Claim Entail?

Filing Your Statement of Claim

Filing a FINRA statement of claim entails a few steps on the part of the claimant. There are three main components to filing the FINRA arbitration statement of claim: 

  • Filing a completed FINRA statement of claim;
  • Filing a Submission Agreement; 
  • Paying all applicable fees when submitting the filing; and
  • Submitting the filing through FINRA’s online DR Portal.

We have already discussed the basics of the FINRA statement of claim. However, that is only one component of the process of properly filing your statement of claim. FINRA provides investors with a basic Arbitration Claim Filing Guide to help you navigate as you initiate a FINRA arbitration. However, if you choose to file, it is important to know and understand all the pieces that need to be submitted alongside your FINRA statement of claim. Understanding each component can help you achieve the greatest chance of a successful arbitration outcome.

Understanding the Submission Agreement

You are required to file a Submission Agreement when you file your FINRA statement of claim. The Submission Agreement states that you agree to FINRA’s arbitration rules and FINRA’s jurisdiction over the matter. This is critical and must accompany your FINRA statement of claim form when filing your paperwork to begin a FINRA arbitration. People commonly forget to submit the Submission Agreement when filing their FINRA statement of claim. Forgetting or neglecting to include a Submission Agreement can unnecessarily delay the start of your arbitration process. An experienced attorney can make sure you have all claim package components necessary to properly begin your claim.

Confirming Fees Due

You will also need to pay any applicable filing fees when submitting your FINRA Statement of Claim form and your Submission Agreement. These fees can vary depending upon the nature of your arbitration and the size of your claim. Fees are typically calculated based on the amount of damages claimed (including punitive and treble damages). Fee calculations usually don’t include expenses and interest. 

Paying the correct fees when you submit your FINRA statement of claim form is essential. If you fail to pay your fees or submit the wrong amounts, FINRA can reject your statement of claim and refuse to commence your arbitration. You can see why understanding the importance of each component of the statement of claim package is key to your success!

Using the DR Portal

A few years ago, FINRA switched to a proprietary online filing system that they call the DR Portal. This enables parties in arbitration to submit their documents online. The online submission system eliminates costly file-by-mail fees. It also does away with the waiting periods and lag time associated with mailing documents through the postal service. To use the system, you or your lawyer will have to register for a DR Portal account.

Consulting With Counsel

Speaking with an experienced securities lawyer can be an essential part of initiating a successful arbitration. While arbitration can be a faster and less expensive alternative to the civil court process, it is not necessarily less complex. Having a knowledgeable lawyer in your corner can take a lot of the stress out of the arbitration process. An experienced securities lawyer can also help increase your likelihood of success. At Kurta Law, we only work with investors, never banks or brokers, so we specialize in advocating for folks like you. Our firm has deep expertise in drafting and filing FINRA statements of claim for investors of all stripes. 

What Makes a FINRA Statement of Claim Successful?

Submitting a strong FINRA statement of claim can help set you up for a fair, successful arbitration. Typically, the strongest statements of claim lay all of the relevant facts pertaining to your case.

A FINRA arbitration statement of claim is similar to a very short, simple complaint in a civil case. However, instead of following rigorous rules of pleading and citing statutes and case law, a statement of claim is much more straightforward. While a civil complaint can go on for 20 or more pages in a minor matter, a FINRA statement of claim in a complex matter might run no more than five pages.

Having the assistance of securities counsel can help make your FINRA statement of claim successful. When discussing how the arbitration process works, your lawyer can show you a FINRA statement of claim example. Seeing how statements of claim are drafted may help you understand how to best share the facts of your case with your lawyer. The best FINRA statements of claim tell a logical story and ask for clear remedies that can be achieved through arbitration. Your lawyer is the best person to work with you on putting together the best statement of claim for your case. 

How Can Kurta Law Help Your Statement of Claim

At Kurta Law, we have helped thousands of investors like you recover millions of dollars through the FINRA arbitration process. We are a nationally-recognized law firm with an international client base. Our passion is helping investors like you regain their financial footing after being victimized by unscrupulous FINRA member firms. We provide clients with individualized attention and a dedication to getting them back on track. Contact us today for a free consultation.