FINRA Targets Non-Attorneys Representing Clients in Arbitration

The Public Investors Arbitration Bar Association has known of a troublesome arbitration-linked fact for some time. So too have proven securities law attorneys who diligently represent clients in private arbitration matters before the Financial Industry Regulatory Authority.

That it this: Material harm has been suffered by many investors over the years who have relied upon so-called “non-attorney representatives” (NARs) to safeguard their rights and promote their interests in FINRA’s arbitration forum.

A recent article by the publication Financial Planning addressing that subject matter duly notes that NARs sometimes charge lower rates than proven securities lawyers with demonstrated client effectiveness before arbitration panels. That is often a solicitation ploy from ex-brokers with problematic prior histories, though. Some of those individuals are even disbarred former agents, a fact that is unknown to their clients.

Others seek to gouge from the outset, with Financial Planning noting “high fees both upfront and as a percentage of any recovered losses.”

“These [non-attorneys] have been causing chaos for decades and taking advantage of investors a second time,” says a principal with the above-cited arbitration bar.

That might not be the case much longer. FINRA officials just voted to bar NARs from taking arbitration cases before the authority for money. The agency’s recommendation has been passed to the U.S. Securities and Exchange Commission, which will make the ultimate call on the matter.

Defrauded or otherwise harmed investors seeking to take a case to FINRA for arbitration are reasonably advised to associate with an established law firm having a demonstrated record of client advocacy in agency proceedings. Attorneys from such an entity can provide valued individual and institutional investors with good-faith and aggressive advocacy focused unstintingly on a best-case outcome.

For more information contact SFMS online or call 877-891-9880.