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Simple English definitions for legal terms
Securities dispute resolution: Deliberation, awards, and fees.
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A quick definition of Securities dispute resolution: Deliberation, awards, and fees.:
Securities dispute resolution is the process of solving disagreements between people or companies involved in buying and selling stocks, bonds, or other financial products. After a hearing, the person or group in charge of making a decision, called an arbitrator, will go away and think about what they heard. They will then write down their decision in a document called an "award." This decision is usually final and cannot be changed unless there are very good reasons. The award will say who won the case and if any money needs to be paid. The arbitrators can also make people do things or stop doing things, like in a court.
A more thorough explanation:
Securities dispute resolution is the process of resolving disputes between investors and brokers or brokerage firms. After hearings are concluded, the arbitrator or panel of arbitrators retires to deliberate and issue a decision in the form of a written document called an “award.”
For example, if an investor believes that their broker has engaged in fraudulent behavior, they may file a claim with a securities arbitration panel. After the hearing, the panel will deliberate and issue an award.
The length of deliberations depends on a number of factors, including the number of arbitrators and the complexity of the case. According to the Financial Industry Regulatory Authority (FINRA), arbitrators should make a final decision within thirty (30) days after they close the record.
Decisions are based on the pleadings, the evidence, and the testimony admitted at the hearing. The arbitrators may also request additional facts and/or briefs from the parties before making their award.
Awards are generally final, and an arbitrator’s decision can only be overturned by a court under very limited circumstances. Usually, awards are brief, and only include very basic information, including which party prevailed, and the payment of damages, if any.
For example, if the arbitration panel finds that the broker engaged in fraudulent behavior and caused the investor to lose money, the panel may order the broker to pay damages to the investor.
The arbitrators can provide much of the same relief as could be obtained in court. The panel can order payment of compensatory or punitive damages, order specific performance by ordering any party to do or refrain from doing any action, and even issue injunctive relief.
For example, if the arbitration panel finds that the broker engaged in fraudulent behavior and is likely to continue engaging in such behavior, the panel may issue an injunction prohibiting the broker from engaging in such behavior in the future.
Finally, the arbitrators may also award attorneys’ fees and costs to the prevailing party. This means that if the investor prevails in the arbitration, the broker may be required to pay the investor’s attorneys’ fees and costs.
For example, if the arbitration panel finds that the broker engaged in fraudulent behavior and caused the investor to lose money, the panel may order the broker to pay damages to the investor as well as the investor’s attorneys’ fees and costs.
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