Guide: What Other Things Occur Upon a FINRA Arbitration Award Besides Winning

Whenever an investor is not satisfied with a broker or a brokerage agency and an investor files a complaint against them, the only way to a solution is the FINRA arbitration process conducted by the Financial Industry Regulatory Authority (FINRA). In court proceedings, a lot of investors tend to misinterpret the outcome of the case once they prevail in it as the final point; however, the award marks this very moment of the real story. Comprehending the main points of what follows a victorious arbitration award at FINRA is of great importance, as it impels you to take the appropriate actions, and thus you will be able to, in fact, receive the money that rightfully belongs to you.

This article demystifies the entire process after the deadline of the case in an easy-to-understand manner—talking about payment schedules, follow-up, appeals, expungement, and other issues.

The essential part of the arbitration procedure of a case in the eyes of the Financial Industry Regulatory Authority (FINRA) is when the impartial arbitrators issue their final ruling, weighing the facts, the testimonials, and the arguments of the two parties involved. The award handed down sets out:

• If the claimant party from the investor side is worthy of reparation

• The amount of money to be paid as compensation

• Nonprincipal sum interest or legal fees

• The broker removing the false statement (expungement)

The award is comparable to a court judgment in that it is binding, enforceable, and legal.

When the panel of arbitration, made up of neutral individuals, comes to a decision that you, their defendant, have the upper hand, the award will be termed “successful.” It might be the case that:

• The broker must pay full compensation for the money he scammed the investor out of

• One of the parties is given partial compensation

• A sum of money is additionally requested as compensation for moral damages

• The Legal fees are reimbursed by the defeated party

• The inaccurate U5/U4 contents are removed from the record (expungement)

The question of what comes next after a triumphant FINRA arbitration award is thus posed.

It would be best to have it looked at piece by ​‍​‌‍​‍‌piece.

According to FINRA regulations, a brokerage company or a broker must deposit the money that was awarded to the customer as a result of arbitration within 30 days of the published decision unless one of the following conditions exists:

• The motion for vacating the award is submitted.

• The private agreement is reached between the parties.

• The award is settled separately.

If the party that loses the case is not taking any legal action against the arbitration award, then they are supposed to pay without delay. A refusal or failure to remit can lead to:

• being suspended by FINRA,

• losing their license,

• being permanently barred from the industry.

Generally, the best firms will pay within the time allowed in order to be safe from any punishment.

Within several days from the time a decision is made, the award is made publicly available by FINRA on its local arbitration awards database. This step assures openness and provides a record that can be utilized later for regulatory or legal purposes.

The recorded decision includes the following:

• the included parties,

• the claims and defenses,

• the court decision (also including what the damages are),

• the arbitrators' opinions.

Should an enforcement action be necessary, there is no better evidence than this publicly available document.

One of the most crucial aspects of the aftermath of a winning FINRA arbitration award is the very limited opportunity for an appeal.

You cannot request an appeal only because you are unhappy with the decision.

Only under very strict and limited circumstances can the party on the losing side bring a motion to vacate to court:

• fraud,

• arbitrator misconduct,

• clear prejudice,

• An award given beyond the panel's authority.

If at all, courts seldom overturn a FINRA award. The percentage of court rulings that vacate FINRA awards is lower than 1%.

In most cases, an award is binding. However, investors frequently bring a motion in court to confirm their award.

Reason?

A court confirms the award, making it an official court judgment, which, therefore, gives you the authority of a court to:

• Bank account garnishments

• Wage garnishment

• Property liens

• Asset seizure

Such a moment is regularly indispensable in situations with:

• Small brokerage firms

• Brokers experiencing financial difficulties

• Firms that do not respond to your request for payment

Knowing what comes after a successful FINRA arbitration award, you should also be aware of the available enforcement options.

Within 30 days, if the firm or broker refuses to pay:

FINRA Can Take Action

As a result of the actions of the authority, it may:

• Terminate membership

• Revoke a license

• Impose a permanent ban on the industry

Most companies of this type do not allow such a thing to happen because it means the end of their career.

You Can Enforce the Judgment in Court

The court can order the execution of the judgment by your attorney once it is confirmed. He/She will be in charge of carrying out this court ruling. This may entail:

• Bank accounts freezing

• Asset confiscating

• Liens forcing payment

• Wages or commission garnishments

Once the payment is not made by the deadline, the amount of the award starts to accumulate interest.

The interest rate is generally:

• Specified in the award, or

• Determined according to state legislation

The longer the delay that extends the time period, the more the investor will be able to claim in interest.

It may occur that, after an arbitration award, parties enter into a settlement agreement. What could be the reasons?

• The defeated litigant desires to lower the payment

• They want privacy

• They wish to dodge the execution of the judgment

Settlements after awards happen quite often; however, your lawyer should always check them to make sure that you get an appropriate recompense.

In cases when brokers prevail, or the arbitrators determine that the accusation is groundless, the panel may suggest that the broker be relieved of the FINRA record.

However, expungement is never a matter of course.

The broker has to:

• Put forward a request to a court

• Get the award confirmed

• Ask the court to direct FINRA to delete the record from its files

Generally, if the investor is the one to be awarded, brokers are not entitled to the expungement of their records.

This is a straightforward checklist that helps you grasp the situation of a successful FINRA arbitration award and follow-up tasks:

✔ Review the final award in detail

Amounts of harm, interests, attorneys' fees, and time limits ought to be verified.

✔ Request your lawyer to keep an eye on the 30-day payment window

It usually takes 2–3 weeks to process most payments.

✔ Talk over with your lawyer if it would be right to seek court confirmation of the award

This would chiefly be of importance if you were to anticipate that the firm might delay paying.

✔ Keep an eye on correspondence from the party that is losing

Some of them may propose the discussion of settlement terms.

✔ Get ready for enforcement in case of payment default

It is advised to take immediate action if the payment is ​‍​‌‍​‍‌late.

Most of the time:

• Brokerage firms usually pay within 30 days

• Payments are often delivered within 10–20 days

In case the firm denies payment or submits a motion to vacate, the procedure may take several months.

The disengagement phase, which follows a triumph, can nevertheless be intricate.

A seasoned lawyer's involvement facilitates:

• Submitting a request for confirmation of the award

• Replying to a motion to vacate

• Implementing the court decision

• Arranging settlements by negotiation

• Compensating money with interest

Actually, it is only a small fraction of the award that has been won.

Knowing the post-arbitration award events in FINRA helps investors to be in control of their rights and to feel confident in taking the next steps after the dispute. A FINRA decision is far from being merely a ruling—it is a strong, legally binding court decision that guarantees investors' proper reparation.

Each step from the 30-day payment deadline to enforcement in court is vital in helping investors eventually recover their financial losses. Ensuring that you are represented by a competent attorney is the surest way of obtaining complete and prompt compensation while, at the same time, unnecessary delays are ​‍​‌‍​‍‌avoided.