Investment News

How to Choose the Right FINRA Lawyer When Regulators Are After Your CRD

Publish date: Sun, 21 Feb 2021, 08:10 PM
0 359
General investment news and blog posts

Image Source:

The investment market presents numerous lucrative opportunities not only to investors but to their brokers and financial advisors as well. Invest in the right asset at the right time, and you could make a fortune if you were lucky enough. Even when one gets all their research right, there is always a possibility of losing money simply because lady luck wasn't on their side. While the majority of transactions between investors and their brokers or advisors result in positive outcomes, sometimes the pieces don't fall in the right places.

Capital losses can lead to strained relationships, and more often than not, the financial advisor or broker is the one who has to face the music. One black mark on your CRD record could turn away prospective customers. When being investigated by the FINRA regulators, it is important for you to put your best foot forward and be ready for whatever comes your way. Read on to find out how you can protect your interests when regulators are after your CRD.

What Is CRD?

CRD stands for Central Registration Depository, and any broker that is registered to sell stocks in the United States of America is registered against a CRD number. The CRD is essentially a repository that maintains a database containing information of all the registered brokers and brokerage firms in the country and is regulated and controlled by the Financial Industry Regulation Authority, abbreviated as FINRA, a non-government self-regulatory organization that caters to the brokerage industry.

The data stored in the CRD includes details like licensing, professional background, complaints, and any disciplinary action. These details are linked to the CRD number for the securities professionals and can be accessed by prospective clients. As a consequence, a spotless CRD profile can help rope in new customers.

Image Source:

Why Does Arbitration Require a Lawyer?

Complaints made by customers against their brokers and brokerage firms are usually settled through arbitration. The arbitration generally involves a FINRA arbitrator,  and sometimes a panel, that listens to the arguments made by both the parties and examines any form of documented evidence to subsequently provide a decision known as an award.

As a broker or a brokerage firm, it can become quite difficult to perform registrations if there are any prior complaints, disciplinary actions, bankruptcies, or black marks on your record. Having a capable FINRA lawyer on your side during arbitration is crucial. During a FINRA arbitration investigating the occurrence of any wrongdoings, you lose access to one of the most important rights in your arsenal, the right to refuse to answer a question. Furthermore, FINRA's rules, procedures, and policies can be quite complicated. As a result, the arbitration can often end in favor of the opposition, which could tarnish your CRD record. That’s why having a FINRA lawyer is very important in order to be able to effectively defend your interests.

Effective Tips to Choose the Right FINRA Lawyer

While looking for a FINRA lawyer, it is important to make sure that you make the right decision. Here are a few things you must keep in mind while making the decision.

Familiarity with the Process

The procedure of securities arbitration is quite a unique process. The process of a FINRA arbitration is significantly different from the proceedings of a court case as such familiarity with the process of Arbitration is important for a lawyer in order to defend your interests effectively. For this, the lawyer must be well versed with FINRA's Arbitrator's Guide, Discovery Guide, Regulatory Notices, and Sanctions Guidelines. 

Analyze Their Previous Arbitration Resolutions

A good way of assessing the capability of a FINRA lawyer is to analyze the number and the result of previous arbitrations that the lawyer has participated in. As with any other profession, successful professional history is a good way of assessing the professional's capability. But when it comes to securities arbitration, a lawyer that has successfully defended numerous clients in securities arbitration and in general participated in various arbitration proceedings, both in favor of the defendant or the accuser, has the advantage of being familiar with the arbitrators.

The world of securities arbitration is a small one, and it is common to come across the same arbitrators, attorneys, witnesses, and brokerage firms. An experienced FINRA lawyer would not only have experience with multiple arbitrators but would also understand their nature and outlook, which can be extremely beneficial during the arbitration process.

Try to Get a Free Case Evaluation

FINRA lawyers and their firms often offer free case evaluations. These evaluations can help you assess the lawyer and their familiarity with handling cases like yours. During the evaluation, the lawyer must be not only able to demonstrate familiarity with different types of financial investments (like blue-chip stocks, junk bonds, non-conventional investments, etc.) but also with various industry rules, regulations, and industry standards. 

It is also important that your attorney shares your opinions and your worldview, and a free case evaluation can help you gauge that. Since you will be spending a considerable amount of time with the lawyer discussing your case, you should get along well and not have conflicting views.

Refer Client Testimonies

Getting access to the client testimonies of a FINRA lawyer is quite straightforward, and they themselves display those proudly as a badge of honor. While these client testimonies would only give you one side of the story, they will definitely give you an idea of the ability of the lawyer. In addition to that, you could also consult your go-to lawyer regarding the reputation of the FINRA lawyer that you wish to employ.

A securities arbitration is completely different from a courtroom proceeding. While you aren’t required to have a lawyer in order to present your arguments during the arbitration, it is highly recommended that you do. Your lawyer must be familiar with the arbitration process as well as the various rules and regulations that FINRA has laid to be able to defend your interests and achieve the best possible outcome. Not all lawyers can rise up to this task, so it is important that you select a lawyer that specializes in securities arbitration. These tips should help you choose the right lawyer if FINRA regulators are after your CRD.


Be the first to like this. Showing 0 of 0 comments

Post a Comment