The First Step: Analyze Account Statements

Attorney Debra Hayes managing partner of The Hayes Law Firm, which focuses on securities arbitration, explained the process used in her office. “The first thing we do when a client contacts us is look at their account statements. We want to see the monthly statements that they get from Merrill Lynch, Edward Jones or Raymond James every month or every quarter. We take a look at those and we can tell whether there’s been wrongdoing. We listen to their story. We look at the documents. From that, we’re pretty much able to tell whether there’s been wrongdoing.

Talking to the Client and Filing a Claim

We conduct an interview with the client and look at the documents. We accept the case. Then we prepare what’s called a Statement of Claim; that’s the document that starts the process. We file that with either the NASD or the NYSE, who sends it to the defendant (they’re called respondents in these actions). They’ll send it to Merrill Lynch and say, ‘Here, you’ve been sued by Mr. Smith and you need to file an answer in 20 days.’ After they file an answer, the discovery process begins. There are no depositions, there’s simply an exchange of documents. Then, a 3-day hearing is set in the major city closest to where the client lives.”

Clients Are Never On Their Own

If you were afraid of being thrown to wolves, think again. According to Hayes, “You’re dealing with our office throughout this process. It takes about a year to 18 months to complete it, so it does go very quickly; unlike a court case. That’s one of the positive things about arbitration. We will be dealing with you throughout this time period, getting additional documents, talking to you about your case, getting feedback and getting you ready for the hearing.

Picking a Panel of Arbitrators & When to Expect a Ruling

The parties pick the panel. At some point, we’ll be sent a list of perhaps 10 to 14 panel members and we choose our panel from that. We end up with a panel of 3. We put witnesses on the stand and go through an evidentiary hearing. Within 30 days, that arbitration panel must enter a ruling—another positive thing. If we win, that money must be paid by the respondent within 30 days. So, hopefully 18 months, worst-case scenario 24 months, you’re done.”

Appeal

The process replaces a trial in state or federal court – and there is generally no appeal. Hayes continued, “You can appeal it, but in the 4 plus years that I’ve practiced in this area, I think I’ve seen only 2 of them appealed—which we won and then the company ends up owing more money because the interest statute continues to tick. These days, courts are threatening more and more sanctions for those who appeal.”

Want your securities arbitration claim reviewed by a top rated attorney? Click here.