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Securities FAQ

So, do I really need a lawyer?

Technically no. You can represent yourself in the Financial Industry Regulatory Authority (FINRA) forum, and if you have a really small case, it may not make sense to hire a lawyer. All you need to do is go to www.finra.org and follow the instructions provided. However, you should understand that statistically, investors who represent themselves tend to fare poorly in FINRA arbitrations. This is not surprising. Brokerage firms put together a strong legal defense team, and you are going to want to have a knowledgeable and experienced advocate in your corner. If you try to represent yourself, you will already have two strikes against you. We strongly urge you, especially if a big chunk of your retirement savings is at stake, to retain a competent lawyer for help.

How much is this going to cost me?

Most of our investor clients retain our firm on a contingency fee basis. While the client is responsible for payment of out-of-pocket costs, there will be no attorney's fees paid unless there is a recovery. The general practice for our firm is to repay the client the costs advanced from the recovery before calculating the fee, so the fee is based on the net recovery. If there is no recovery, there is no fee for the services rendered.

Should I just write a letter to the firm and see whether they will pay me?

We don't recommend this. Generally speaking, the firm refuses to honor such a demand. And many times, you will inadvertently say something in your letter that the firm will later use against you.

What is the FINRA arbitration forum?

FINRA is the Financial Industry Regulatory Authority, a "self-regulatory or organization," formerly known as the NASD. FINRA administers a forum whereby securities industry disputes are submitted to binding arbitration under the FINRA Rules of Arbitration Procedure. Assuming that you signed an arbitration agreement when you opened your account (a very safe assumption), you are required to submit your claim to this forum and you cannot take your claim to court. Our firm has handled hundreds of cases in this forum, and we are very familiar with the ins and outs of FINRA arbitration. Claims exceeding $100,000 will be decided by a panel of three arbitrators; you will have a single arbitrator if your claim is less than $100,000. Generally, cases filed in the FINRA forum are completed within about 12 months of their filing.

Can the broker or the firm appeal if I win?

There is no appeal from FINRA arbitrations, although there are very limited grounds whereby a court will vacate an award. Vacatur of a FINRA award is rare. Absent a vacatur, a brokerage firm is required to pay the award within 30 days or they will lose their right to continue conducting business as a securities firm.

Can you represent me if I live outside of California?

Sure. Law Office of Jeffrey B. Pape, P.C. handles cases for investors throughout the United States. We are also able to represent investors from outside the country if they dealt with American brokerage firms.

We offer this section for informational purposes only. This information is not intended to serve as legal advice, nor should it be relied upon as such. In order to determine whether you have a claim, you must contact us directly. No attorney-client relationship arises until after you contact our office directly.