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California FINRA Lawyers: The Growing Problem of Unpaid FINRA Arbitration Awards

By Erwin J. Shustak, Esq. of Shustak Reynolds & Partners, P.C. posted on Tuesday, November 14, 2017.

Erwin J. Shustak, Esq.
619.696.9500 ext. 109
[email protected]

While FINRA arbitrations were intended to provide investors and industry members a quick and relatively inexpensive procedure by which to settle their disputes with member firms, the fact is that a significant portion of FINRA arbitration awards remain unpaid and there is not much that FINRA is able to do about that.

The issue of millions and millions of dollars of unpaid FINRA arbitration awards has been an embarrassment for FINRA for many years. In 2013, for example, 75 arbitration awards, approximately one-third of the total number of arbitration awards handed down for that entire year, were unpaid, according to a study released in 2016 by PIABA, the Public Investor Arbitration Bar Association. That total of unpaid awards, for that year alone, amounted to $62 million of award money that simply was not paid, either by firms that ceased operations and  shut down, or brokers who left the industry and simply refused to pay their awards.

Shustak Reynolds & Partners, P.C. focuses its practice on securities and financial services law and complex business disputes. We represent many broker-dealers, registered representatives, investment advisors, investors and businesses. For more information, or if you or your company require counsel in these areas, contact us today for a confidential, complimentary consultation.

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