What FINRA arbitration is
FINRA — the Financial Industry Regulatory Authority — licenses and supervises every US brokerage firm and every registered broker. It also runs the forum in which disputes between investors and those firms are decided. Instead of a judge and jury, a panel of one or three arbitrators reads the documents, hears the witnesses, and issues a written award that is binding on both sides. Courts almost never overturn it.
It is a national forum. The rules are the same whether the customer lives in Tulsa or Chiang Mai, and nothing in them turns on where the claimant sleeps.
Why your account agreement requires it
Buried in the paperwork you signed when the account was opened is a pre-dispute arbitration clause. Virtually every US brokerage uses one. It means you gave up the right to sue the firm in court and agreed to bring any claim in FINRA arbitration instead — and the firm agreed to the same.
For an investor abroad, that is good news. A lawsuit would mean a courthouse, a jurisdiction fight, and possibly your physical presence. Arbitration means a Statement of Claim uploaded to a portal.
The six-year eligibility rule
FINRA Rule 12206 bars claims where more than six years have passed since the occurrence or event that gave rise to them. The clock is measured from the event — the recommendation, the trade, the closure — not from when you noticed the loss. State statutes of limitation can be shorter still, and they are argued in the same proceeding.
The practical advice is simple: do not wait to work out which deadline applies. Send the documents and let us date the events.
Simplified arbitration for claims of $50,000 or less
Claims of $50,000 or less (not counting interest and costs) go through FINRA’s simplified process under Rule 12800. A single arbitrator decides the case on the written record — no hearing unless you ask for one, and if you do, it can be a short telephone or video proceeding. Filing fees are lower and the timeline is shorter.
We take simplified cases on contingency like any other. A modest account that a retiree could not afford to lose is exactly the situation the suitability rules exist to protect.
The twelve-to-eighteen-month timeline
The firm has forty-five days to answer the Statement of Claim. The parties then rank and strike arbitrators from lists FINRA provides, exchange documents under FINRA’s Discovery Guide, and set hearing dates with the panel. FINRA’s own statistics put a case that goes all the way to hearing at roughly sixteen months on average; cases that settle — most of them — finish sooner.
Through all of it, your involvement is documents, a few calls, and preparation for testimony. None of it requires you to be in the United States.
Video hearings
Since 2020 FINRA panels have routinely conducted hearings by Zoom, and a party living abroad is a recognized reason to hold one that way. Hearings are typically scheduled a few hours a day over several days, and panels accommodate the time zone of a witness who is twelve hours away.
Mediation — where most settlements are reached — is almost always by video as well.
What can be recovered
Compensatory damages are the core: what the account lost because of the misconduct, often measured against what a properly managed account would have done over the same period. Panels can also award interest, costs, and — where a statute or the account agreement allows — attorneys’ fees. Punitive damages are possible but rare.
An award must be paid within thirty days. A firm that does not pay faces suspension from the industry, which is why awards against operating brokerages are almost always paid.
Why an attorney matters
The firm will have experienced securities defense counsel from the day it receives your claim. The forum is document-heavy and rule-bound: which arbitrators to strike, what to demand in discovery, how to prove damages, when to bring an expert — each decision changes the value of a case. Investors who bring claims with counsel recover more, and settle more often, than those who do not.
Richard Frankowski has done this for more than twenty-five years and has written the ABA’s practitioner text on how it is done. The review of your statements is free, and if there is no case, we will say so.