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SEC Backs FINRA In Arbitration Fee Rate Hike

By George C. Miller, Esq. of Shustak Reynolds & Partners, P.C. posted on Wednesday, October 1, 2014.

The cost of bringing an arbitration claim before the Financial Industry Regulatory Authority’s (FINRA) arbitration division is on the rise.

The SEC, which oversees FINRA, recently pledged support for FINRA’s proposal to increase arbitration claim filing and hearing session fees.  The rate hike will apply to claims larger than $250,000 and will result in filing fee increases of 10 – 25%, depending on the amount at stake in the arbitration, plus additional hearing session fees.  By way of example, the filing fee for a claim involving more than $1 million in damages will rise from $1,575 to $1,725 under the proposed rule change.  The new rule also will increase the member surcharges and processing fees brokerage firms must pay to FINRA.

The fee increases follow FINRA’s recent decision to increase arbitrator pay as part of a move to attract additional—and more qualified—arbitrators.  FINRA has not yet announced when the new fees will take effect.

FINRA’s arbitration division is the mandatory forum for most investors who bring claims against brokerage firms, stock brokers and financial advisors.  In addition, most financial advisors and employees of FINRA brokerage firms must bring any employment disputes in the FINRA arbitration forum.  Our securities and investment attorneys in San Diego, Irvine, San Francisco and New York are highly experienced in handling FINRA customer and employment disputes, as well as FINRA and SEC investigations and enforcement proceedings.

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