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FINRA Offers Lower-Cost Alternative to Dispute Resolution Through Mediation

Friday, January, 25, 2013


The Financial Industry Regulatory Authority (FINRA) has recently launched a program in which disputes regarding smaller cases can be settled pro bono or by reduced-fee telephone mediation.  The program began January 15, 2013, and is completely voluntary and anyone who opens a case with the FINRA involving a claim of $50,000 or less meets the eligibility requirements. 

As the largest regulator for securities firms conducting business in the US, the Financial Industry Regulatory Authority (FINRA) states that its mission is to “protect America's investors by making sure the securities industry operates fairly and honestly.” As stated on its website, FINRA operates with 4,290 brokerage firms, about 161,265 branch offices and approximately 630,390 registered securities representatives.

According to Linda Fienberg, who is president of the FINRA Dispute Resolution department, “Telephone mediation is a lower-cost alternative, and would benefit dispute resolution forum users in many ways.” She continues to state that, “Besides eliminating the travel and preparation costs typically associated with in-person mediation, telephonic mediation offers greater convenience and flexibility, and is a practical alternative for all parties involved.”

The pilot program invites any party interested in receiving these services and meeting the eligibility requirements to visit Representatives will assist anyone looking to file a claim to ascertain that the proper steps are followed and that all eligibility requirements are met.  The FINRA has also instructed its staff to inform parties who are eligible of the program if a dispute meeting eligibility requirements arises.  

According to FINRA, the cost of the reduced-fee mediation is $50 per hour for claims between $25,000.01 and $50,000, and eligible parties are not charged any type of administrative fee to open a claim. For claims involving damages of $25,000 or less, all mediation services are provided on a pro bono basis.