Stewart A. McMillan, Esq.

FINRA Arbitrations

FINRA is short for the Financial Industry Regulation Authority.

FINRA is a private company whose principal function is to resolve securities-related disputes between brokers, investors, or shareholders.

FINRA may also be utilized to resolve issues related to financial industry employment contracts, where the contract specifies that both expressly agree to resolve disputes through FINRA.

FINRA offers both arbitration and mediation in order to resolve disputes.

FINRA arbitrations are generally decided by a panel of three independent arbitrators chosen by the parties. However, they can also be decided by one arbitrator.

The arbitrator’s decision is binding and not appealable. FINRA offers a much quicker resolution of disputes than a civil litigation and is generally much cheaper.

FINRA also offers mediation to resolve disputes. Unlike FINRA arbitrations, FINRA mediations are non-binding and do not involve a formal hearing or the presentation of evidence or a formal decision from the mediator.

Some types of FINRA-related claims our New York State Employment Law Attorneys have handled include:

  1. Wrongful Termination. An employer may not fire an employee for reasons which violate the terms of the contract, state or federal law;
  2. Forgivable Loans. Some financial firms offer “Forgivable Loans” as an incentive to executives transitioning to the firm from other firms. These “Forgivable Loans” are generally not required to be paid back by the employee if they meet conditions in the contract which usually require them to stay the minimum duration specified under the contract. Employers often bring suit to enforce these forgivable loans if they think an employee or left too early or violated the terms.
  3. Restrictive Covenants. A restrictive covenant generally attempts to prevent an employee from working in the same industry, in the same geographical area, or with certain existing clients for a designated period of time after leaving the firm. Such restrictive covenants are generally frowned upon under New York State Law but will be enforced under the right circumstances.
  4. Form U-5 Expungements. A form U-5 is a form which all firms must fill out per securities regulations when an employee leaves his employment. Sometimes, employers place harmful information, or even false or misleading information, in the report.If the employee believes the report contains either false or misleading information, he may generally bring a FINRA arbitration against the employer to have it removed and to seek damages against the employer.
  5. Indemnity Claims Brought by Employers. Some employers may seek to recoup losses from employees which they believe were involved in questionable business dealings which resulted in damages to the corporation. In a FINRA arbitration, our firm has experience representing the employees in which these indemnity claims have been brought against.

Accordingly, if you believe you or someone you know has a basis to bring a FINRA arbitration, or a FINRA arbitration has been brought against you, do not hesitate to pick up the phone and call our New York state employment lawyers immediately. The telephone consultation is absolutely free, and our attorneys are standing by 24/7 to answer any and all questions you may have.

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