Filing a statement of claim with FINRA is a crucial step for investors seeking justice in financial disputes. FINRA, the Financial Industry Regulatory Authority, offers a platform for resolving conflicts between investors and financial advisors or firms.
The process involves submitting a detailed account of the dispute, along with necessary documents and fees. Investors must file their claims within six years of the event in question.
The filing fee ranges from $50 to $2,300, depending on the claim’s complexity. Online submission through FINRA’s DR Portal streamlines the process. For claims over $50,000, a panel of three arbitrators is assigned.
Smaller claims are handled by a single arbitrator. The average FINRA proceeding takes about 18 months to resolve. Understanding this process helps investors protect their rights. Let’s explore the key steps involved.
Haselkorn & Thibaut have over 50 years of experience and offer free consultation to investors. Call us today to find out your recovery options.
Key Takeaways
Table of Contents
- FINRA arbitration offers a faster, cheaper way to resolve financial disputes than going to court.
- A Statement of Claim must include names of parties, a detailed account of events, legal basis, relief sought, and supporting documents.
- Filing fees range from $50 to $2,300 for customers and non-members, and $225 to $4,200 for members, based on claim amount.
- Claimants can file online through FINRA’s Party Portal or mail their claim to the nearest FINRA office within six years of the event.
- Respondents must file an answer within 45 days of receiving a claim, addressing each allegation and presenting their defense.
Understanding the Statement of Claim
A Statement of Claim is a formal document that starts an arbitration process with FINRA. This document outlines the facts of your case, the legal basis for your claim, and the compensation you seek from the other party.
Definition and Purpose
A Statement of Claim serves as the starting point for FINRA arbitration. It outlines the key details of a dispute between investors and financial professionals. This document tells the story of what happened, who was involved, and what the claimant wants as a result.
Its purpose is to clearly explain the issues and set the stage for resolving the conflict.
FINRA requires a Statement of Claim to start the arbitration process. The claim must include specific information about the dispute, such as dates, amounts of money involved, and any non-monetary damages sought.
Claimants need to file this document within six years of the event in question. This timeline ensures that cases are handled while evidence and memories are still fresh.
Key Components of a Statement of Claim
A Statement of Claim forms the backbone of your FINRA arbitration case. It must include several key elements to ensure your complaint is clear and complete.
- Names of Parties: List all claimants and respondents involved in the dispute.
- Detailed Account: Provide a clear description of the events leading to the complaint, including relevant dates.
- Legal Basis: Outline the specific laws or regulations you believe the respondent violated.
- Relief Sought: State the type of compensation you’re seeking, such as monetary damages or specific actions.
- Supporting Documents: Attach any evidence that backs up your claim, like account statements or correspondence.
- Submission Agreement: Include a signed agreement to submit to FINRA arbitration.
- Filing Fees: Pay the required fees based on the amount of your claim.
- Proof of Service: Show that you’ve properly notified all parties named in the claim.
- Jurisdiction: Explain why FINRA has the authority to hear your case.
- Statute of Limitations: Confirm that you’re filing within the allowed time frame for your type of claim.
Submission Agreement
The Submission Agreement forms a crucial part of filing a claim with FINRA. This legal document binds all parties to FINRA’s rules and procedures for arbitration.
Importance and Requirements
The Submission Agreement plays a crucial role in the FINRA arbitration process. It confirms that all parties understand and accept FINRA’s rules and the arbitrator’s decision. This document is a must-have for filing a claim.
Without it, FINRA won’t process your case.
You can get the Submission Agreement from FINRA’s website or through their Party Portal. Fill it out carefully, making sure all details match your Statement of Claim. Once complete, you must serve it to all parties involved via the DR Portal.
This step ensures everyone has the same information as the arbitration moves forward.
Where to Obtain and How to Fill It Out
After understanding the importance of the Submission Agreement, you need to know where to get it and how to complete it. FINRA provides easy access to this crucial document, and filling it out correctly is essential for a smooth claim process.
- Obtaining the Submission Agreement:
- Visit FINRA’s Arbitration and Mediation page at finra.org
- Look for the “Forms” section on the website
- Download the Submission Agreement form
- Filling out the Submission Agreement:
- Complete the “Claimant” section with your personal information
- Fill in the “Respondent” portion with details of the party you’re filing against
- Ensure all information is accurate and matches your Statement of Claim
- Signature requirements:
- Sign and date the form
- If you have legal representation, your lawyer must also sign
- For multiple claimants, each person must sign separately
- Submission format:
- Keep the form unaltered from its original state
- Use blue or black ink for handwritten entries
- Type entries if possible for better clarity
- Additional documents:
- Attach your Statement of Claim to the Submission Agreement
- Include any supporting evidence or exhibits
- Review process:
- Double-check all entries for accuracy
- Ensure consistency between the Submission Agreement and Statement of Claim
- Verify that all required fields are completed
- Submission methods:
- Submit online through FINRA’s Party Portal for faster processing
- Mail physical copies if online submission isn’t possible
- Follow FINRA’s specific mailing instructions for different payment types
Filing Fees and Payment Methods
Filing fees for FINRA claims vary based on the claim amount and complexity. FINRA accepts several payment methods, including credit cards and electronic fund transfers, to make the process easier for claimants.
Overview of Costs
Filing a Statement of Claim with FINRA involves specific costs. These fees vary based on the claim amount and the type of filer.
| Filer Type | Claim Amount | Filing Fee Range |
|---|---|---|
| Customers and Non-Members | Various | $50 – $2,300 |
| Members | Various | $225 – $4,200 |
| Unspecified Damages | N/A | Adjusted by Director |
The Director may adjust fees for claims without specified damages. Parties can get a partial refund if they settle or withdraw their claim more than 10 days before a hearing. This refund option helps offset initial costs for resolved disputes.
Accepted Payment Methods
After understanding the costs involved, it’s crucial to know how to pay them. FINRA offers several payment options to make the process convenient for all parties.
- Checks: FINRA accepts checks as a payment method. When sending a check, include the invoice number to ensure proper processing.
- ACH Payments: This electronic transfer method allows direct payment from a bank account to FINRA.
- Credit Cards: For those who prefer plastic, FINRA accepts credit card payments.
- Wire Transfers: This option enables quick, secure transfers of large sums from one bank to another.
- E-Bill System: FINRA’s preferred payment method. It streamlines the process and reduces errors.
- E-Bill Company ID: Firms must provide FINRA’s specific Company ID when making E-Bill payments.
- Online Portal: Many payments can be made through FINRA’s secure online platform.
- Payment Deadlines: Each method has specific timelines. Adhere to these to avoid late fees or penalties.
- Fee Waivers: In some cases, FINRA may waive fees. Check eligibility criteria before filing.
- Multiple Claim Payments: For multiple claims, separate payments are often required.
Filing Procedures
FINRA offers two main ways to file a statement of claim. You can submit your claim online through the FINRA Party Portal or mail it to the nearest FINRA office.
Online Submission through the Party Portal
FINRA offers a streamlined online submission process for filing a statement of claim. Users can access the Party Portal to submit their claims efficiently and securely.
- Create an account: Sign up for the DR Portal to start the filing process.
- Select “File a New Arbitration Claim”: This option begins your submission.
- Prepare your statement of claim: Draft a clear, concise document outlining your case.
- Attach supporting documents: Upload any relevant evidence or paperwork.
- Review submission agreement: Read and accept the terms before proceeding.
- Pay filing fees: Submit payment through the portal using accepted methods.
- Final review: Double-check all information for accuracy.
- Click “Submit”: This action officially files your claim with FINRA.
- Receive confirmation: The portal will provide a receipt of your submission.
- Track your case: Use the portal to monitor the progress of your claim.
Mailing Options and Requirements
FINRA offers mailing options for filing a Statement of Claim. Claimants must follow specific requirements to ensure proper submission.
- Address: Send all documents to FINRA’s New York Office.
- Copies: Include enough copies for all parties involved in the dispute.
- Service: Serve all documents to every party named in the claim.
- Packaging: Use secure packaging to protect sensitive information.
- Tracking: Use a trackable mailing method for proof of delivery.
- Timing: File claims within 6 years of the event causing the dispute.
- Fees: Include the correct filing fee with your mailed submission.
- Forms: Attach a completed Submission Agreement to your claim.
- Signature: Sign all required documents before mailing.
- Cover Letter: Include a brief cover letter listing all enclosed items.
- Page Numbers: Number all pages of your claim for easy reference.
- Formatting: Use clear, readable fonts and proper spacing in your documents.
- Exhibits: Label and organize any supporting exhibits clearly.
- Contact Info: Provide current contact information for all parties.
- Deadlines: Allow enough time for mailing to meet filing deadlines.
Responding to a Statement of Claim
Respondents must act quickly when they receive a statement of claim. They need to file an answer within 45 days, detailing their side of the story and any defenses.
Required Actions for Respondents
FINRA rules require prompt action from respondents after receiving a statement of claim. Respondents must act quickly to protect their interests and comply with FINRA regulations.
- Review the statement of claim carefully
- Read all allegations and claims thoroughly
- Note important dates, facts, and requested remedies
- Identify any errors or omissions in the claim
- Prepare and sign the Submission Agreement
- Obtain the form from FINRA’s website or the claim packet
- Fill out all required information accurately
- Sign and date the agreement
- Draft a detailed answer
- Address each allegation in the claim
- Present facts and defenses clearly
- Include any counterclaims, cross claims, or third-party claims
- Gather supporting documents
- Collect relevant records, contracts, and communications
- Organize evidence to back up your defense
- File response within 45 days
- Submit answer and Submission Agreement to FINRA
- Meet the deadline to avoid default proceedings
- Pay required fees
- Check FINRA’s fee schedule for current costs
- Submit payment with your response
- Serve documents on other parties
- Send copies of your answer to the claimant
- Use a method that proves delivery, like certified mail
- Consider legal representation
- Consult with an attorney familiar with FINRA arbitration
- Decide if you need assistance with the process
- Prepare for further proceedings
- Be ready for potential settlement talks
- Start planning your arbitration strategy
Fees Associated with Responses
Responding to a statement of claim involves certain fees. These costs depend on the type of response and the timing of submission. Here’s a breakdown of the fees associated with responses:
| Response Type | Fee Amount | Notes |
|---|---|---|
| Answer Only | $0 | No fee for a simple answer |
| Counterclaim | Varies | Based on claim amount |
| Cross-claim | Varies | Based on claim amount |
| Third-party claim | Varies | Based on claim amount |
| Late Response | $50 | If filed after the due date |
Respondents must pay fees for counterclaims, cross-claims, or third-party claims. The exact amount depends on the claim value. Timely payment is crucial. Failure to pay can lead to default proceedings. This could result in a judgment against the respondent. To avoid extra costs, file responses within the given timeframe. Check FINRA’s fee schedule for current rates. Always confirm fee amounts before submitting a response.
How to Sue for Financial Advisor Malpractice
Suing a financial advisor for malpractice involves filing a claim with FINRA. Investors must gather evidence of wrongdoing, such as unauthorized trades or misrepresentation of risks.
They need to file a statement of claim detailing the facts, available defenses, and remedies requested. FINRA’s dispute resolution process offers an alternative to traditional court litigation.
The average FINRA proceeding lasts about 18 months, with faster options for seniors or ill investors.
Filing fees vary based on the claim amount. Claims under $50,000 use one arbitrator, while larger claims require three. Investors can file online through FINRA’s Party Portal or by mail.
They must also submit a signed submission agreement. FINRA provides a securities dispute resolution forum for these cases. The next section will cover the conclusion of the filing process.
Conclusion
Filing a statement of claim with FINRA requires careful steps. Investors must prepare a detailed claim and submit it with the right forms. Fees vary based on the claim amount, but online filing can simplify the process.
For those facing financial advisor malpractice, FINRA offers a path to seek justice. Understanding these procedures empowers investors to protect their rights in the securities industry.
FAQs
1. What is a statement of claim in FINRA arbitration?
A statement of claim is a document filed with the Financial Industry Regulatory Authority, Inc. (FINRA) to start arbitration. It outlines the relevant facts, causes of action, and relief sought in a dispute.
2. Do I need legal assistance to file a FINRA claim?
While not required, legal help can be valuable. The process involves complex pleadings and may touch on the practice of law. Many claimants seek attorneys to navigate arbitrations and negotiations effectively.
3. Can I include third-party claims in my FINRA statement?
Yes, you can include third-party claims in your statement. FINRA rules, such as SR-FINRA-2008-031, allow for this. However, specific guidelines apply to these claims.
4. Are there fees associated with filing a FINRA claim?
Yes, FINRA charges filing fees based on the claim amount. These may include attorneys’ fees and arbitrator compensation. Regulatory Notice 09-04 provides details on the fee structure.
5. Can I file a class action lawsuit through FINRA arbitration?
No, FINRA does not handle class action lawsuits. Rule SR-FINRA-2008-021 prohibits class actions in arbitration. Such cases are typically heard in courts.
6. What information should I include in my FINRA statement of claim?
Your statement should contain a clear account of the dispute, including relevant facts, specific causes of action, and the compensatory damages sought. It must also include a signed submission agreement as per SR-NASD-2003-158.
