How Long Does FINRA Arbitration Take? A Step-by-Step Timeline
Investors who have suffered losses due to broker misconduct often ask a simple but important question: how long will it take to recover my money?
The answer depends on several factors, but most cases filed with the Financial Industry Regulatory Authority (“FINRA”) follow a fairly predictable timeline. In general, FINRA arbitration cases take 12 to 18 months from filing to final award, though some resolve sooner through settlement.
Below is a step-by-step breakdown of what to expect.
Step 1: Filing the Statement of Claim (Month 0)
The process begins when your attorney files a Statement of Claim with FINRA. This document outlines:
- The facts of your case
- The alleged misconduct (unsuitable investments, misrepresentation, etc.)
- The damages you are seeking
Once filed, FINRA formally opens the case and assigns a case number.
Timeline: Immediate start
Step 2: Respondent’s Answer (Month 1–2)
The brokerage firm or financial advisor (the “Respondent”) typically has 45 days to file an Answer.
In the Answer, they will:
- Admit or deny the allegations
- Raise defenses
- Possibly assert counterclaims
Timeline: ~1–2 months from filing
Step 3: Arbitrator Selection (Month 2–4)
FINRA provides both sides with a list of potential arbitrators. Each side can:
- Rank preferred arbitrators
- Strike unacceptable candidates
FINRA then appoints a panel of one or three arbitrators, depending on the size of the claim.
Timeline: ~2–4 months
Step 4: Initial Prehearing Conference (Month 4–5)
Once the panel is selected, an Initial Prehearing Conference (IPHC) is scheduled.
During this call, the parties and arbitrators will:
- Set discovery deadlines
- Schedule hearing dates
- Address preliminary issues
This step essentially creates the roadmap for the case.
Timeline: ~4–5 months
Step 5: Discovery Phase (Month 5–10)
Discovery is where both sides exchange documents and evidence. This may include:
- Account statements
- Emails and communications
- Internal firm records
- Compliance documents
Unlike court litigation, FINRA arbitration has limited depositions, which helps streamline the process.
Timeline: ~5–10 months
Step 6: Pre-Hearing Motions & Settlement Discussions (Ongoing)
Throughout the case, both sides may:
- File motions (e.g., to dismiss certain claims)
- Engage in settlement negotiations
Many FINRA cases settle before the final hearing, often during or after discovery.
Timeline: Ongoing throughout the case
Step 7: Final Hearing (Month 10–15)
If the case does not settle, it proceeds to a final hearing, similar to a trial but less formal.
At the hearing:
- Witnesses testify
- Evidence is presented
- Attorneys make arguments
Hearings may last from a few days to several weeks depending on complexity.
Timeline: ~10–15 months
Step 8: Arbitration Award (Within 30 Days After Hearing)
After the hearing concludes, the arbitration panel issues a written decision, known as an award.
FINRA rules require the award to be issued within 30 days of the hearing’s close.
The award will state:
- Whether damages are granted
- The amount awarded (if any)
- Responsibility for fees
Timeline: ~1 month after hearing
Typical FINRA Arbitration Timeline (At a Glance)
- Filing to Answer: 1–2 months
- Arbitrator Selection: 2–4 months
- Discovery: 5–10 months
- Hearing: 10–15 months
- Final Award: 12–18 months total
What Can Affect the Timeline?
Not every case follows the exact same schedule. Factors that may speed up or delay your case include:
- Case complexity (e.g., multiple accounts or products like non-traded REITs or Delaware Statutory Trusts (DSTs)
- Number of parties involved
- Scheduling availability of arbitrators
- Settlement negotiations
- Motions to dismiss or procedural disputes
In some cases, investors may resolve claims in under a year if a favorable settlement is reached early.
Why FINRA Arbitration Is Faster Than Court
Compared to traditional litigation, FINRA arbitration is generally quicker because:
- Discovery is more limited
- There are fewer procedural delays
- Cases are not subject to crowded court dockets
For investors, this means a more efficient path to potential recovery.
Speak With a FINRA Arbitration Attorney
If you believe your financial advisor recommended unsuitable investments or failed to disclose risks, you may be entitled to recover losses through FINRA arbitration.
Understanding the timeline is the first step—taking action is the next.
With offices in Chicago and Seattle, the securities attorneys at The White Law Group represent investors in claims against their brokerage firms in all 50 states. Please call The White Law Group for a free consultation at (888)637-5510.