Yes, there are small claims procedures in securities arbitration called “simplified arbitration.” Arbitration is an alternative dispute resolution procedure that allows disputing parties to settle out-of-court, thus, avoiding high costs and hassles of a lawsuit by having an arbitrator determine fault and compensation, instead of a judge. Arbitration is generally quicker and less costly than a traditional lawsuit that is entangled in the courts system.
Unlike decisions made by a judge in court, you cannot appeal an arbitration decision. You may be able to challenge the decision in very limited circumstances, but this is rare. Many investment brokers and firms require clients to resolve their investment related disputes through arbitration.
Simplified arbitration is a form of arbitration for those with a small claim equal to or less than $25,000. It is typically less expensive and time consuming because you are not required to appear in person at a securities hearing. The arbitrator makes his decision based on documents and written descriptions of the situation provided by both you and the other party. Although simplified arbitration differs from a lawsuit in various ways, it is still a good idea to seek the advice of a securities attorney before initiating it.
You have a right to be represented by an attorney at a securities arbitration hearing, and the broker or firm will most likely have an attorney, so it will be beneficial to have the skills and experience of a qualified securities attorney working for you.