Dispute Resolution & Mediation Flashcards

In a customer dispute where the claim exceeds $100,000, how many arbitrators will generally hear the case under FINRA rules, absent party agreement otherwise?

Answer: Three

FINRA Rule 12401 provides for a three-arbitrator panel when claims exceed $100,000.

A broker-dealer wants to enforce a pre-dispute arbitration agreement against a customer who is part of a putative class action. What do FINRA rules provide?

Answer: Class action claims are not eligible for FINRA arbitration, and the agreement cannot be enforced against class members

FINRA Rule 12204 bars class claims from the forum and prohibits enforcing arbitration agreements against class members.

Which describes an arbitration award in a FINRA proceeding?

Answer: It is generally final and binding with no right to appeal on the merits

Awards are final and binding and subject only to narrow judicial vacatur.

An associated person has a dispute with their member firm about compensation. Where must it generally be resolved?

Answer: Through FINRA's industry dispute arbitration procedures

FINRA Rule 13200 requires arbitration of most disputes among members and associated persons.

Is mediation under FINRA's program binding on the parties unless they reach a settlement?

Answer: No, it is voluntary and non-binding, and a party may withdraw

FINRA mediation is voluntary and non-binding; no outcome is imposed without agreement.

How long does a respondent generally have to serve an answer to a FINRA statement of claim?

Answer: 45 days

FINRA Rule 12303 gives respondents 45 days from receipt of the statement of claim to answer.

A pre-dispute arbitration clause may NOT do which of the following?

Answer: Limit the customer's ability to file a claim in court that the rules allow

FINRA rules prohibit clauses that limit the rights of parties to file claims in court that are permitted under the rules.