Straight talk
Why hire a lawyer at all?
The famous phrase answers it: "A man who is his own lawyer has a fool for a client." The numbers answer it harder.
8%
win rate for investors who represented themselves at FINRA hearings (2015–16)
52%
win rate for claimants represented by counsel
~3,500
cases through FINRA arbitration each year
1,000+
clients I have represented in securities arbitration
What is securities / FINRA arbitration?
The United States Supreme Court ruled in 1987 that any investor opening an account at a broker-dealer can be required to sign a binding arbitration provision. So instead of court, investors take their claims through arbitration — administered by one organization, FINRA, under one set of rules.
Arbitration differs from court most in the time involved: the entire process takes far less of it. The result is final — brokerage firms have very limited rights to appeal, whereas court cases can drag on for years. It is also cheaper: no depositions, no travel costs except the arbitration itself. Some cases still belong in court — where there is no binding arbitration agreement, or in a class action.
Why an experienced securities arbitration lawyer — not just a good trial lawyer?
I have been known to say on many an occasion: a seasoned trial lawyer is a fish out of water in a securities arbitration. Different rules, procedures, and protocol. The discovery process is the most unusual part for a business trial lawyer — no depositions, no interrogatories, and a Discovery Guide about which a great deal of gamesmanship has developed.
Half the battle is getting the necessary documents from the brokerage firms. Because arbitration is more lax than court, firms think they can get away with simply not producing harmful documents. I have been fighting exactly these discovery battles for over thirty years.
I wrote an article on the subject back in 1990 — “Forced Arbitration — Perfect Justice? Discovery in Arbitration,” published in the Securities Arbitration Commentator.
The arbitrator selection process
In arbitration there is no judge and jury — there is a panel, usually three people who are both. The lawyer representing investors must know the art of getting the best arbitrators on that panel. Having represented more than a thousand clients in securities arbitration — and having sat as an arbitrator myself — I have honed a very good methodology in selection.
The first step you should take
If you think you may have a claim, my advice has no downside other than your time: find a securities arbitration lawyer to evaluate your case and not charge you. Most of us, like myself, do this for free. I have evaluated many a case where, after review, I advise that no action should be taken. The uncompensated time is simply the cost of doing business as a securities attorney — and you come away knowing an experienced lawyer evaluated your case.
How are securities arbitration attorneys paid?
Most are compensated on contingency — a percentage of your recovery, only if you recover. The benefits to you: no fees if you lose, and a lawyer whose interests are aligned with yours. But contingency is not the only way, and the choice is yours, not the lawyer’s. Colorado ethics rules require that clients be told they may choose time-based, fixed, or contingent fees.
There are also hybrid agreements. I may allow a client to pay hourly through the discovery phase — where we often find the smoking-gun documents — then switch to contingency. Or a lower hourly rate paired with a lower contingency fee. If a case has too many warts for me to take on contingency, I will say so, and refer it to another lawyer who might see it differently.
Your move
Ready for the honest evaluation?
Free, and worth every penny. You may hear the answer you did not want — but you will go on with your life knowing an experienced securities lawyer looked at your case.