Fees, Costs and Other FAQ
1) Do I have to arbitrate . . . Can't I just file a lawsuit?
Answer: In all likelihood, you must arbitrate. In all likelihood, you cannot file a lawsuit against either the brokerage firm or the broker. This is so because most brokerage firms have an "arbitration" clause in the customer agreement. Don't despair. Arbitration is usually faster and cheaper than filing a lawsuit.
Most investor arbitrations take place under rules that the Financial Industry Regulatory Authority ("FINRA") put out. FINRA's rules call your complaint a "Statement of Claim" ("SOC"). Your SOC will explain what the brokerage firm (or the broker) did wrong to cost you money. Shortly after we file your SOC, and the necessary filing and other fees are paid, FINRA will send your SOC to the brokerage firm and to the broker. FINRA typically gives them 45 days to respond to your SOC.
After that, we and the other side will exchange requests for information and documents that relate to what we've said in your SOC. We call this phase of the case discovery. Relax, you need not worry about anyone taking your deposition; FINRA's rules prohibit depositions.
Most claims are decided by a panel of three arbitrators, one of whom is always a stockbroker or other member of the securities industry. The other two members cannot be associated with the securities industry.
2) Attorneys' Fees-How We Get Paid
We will evaluate your case for free. Then, if we believe you have a good claim, we handle most cases on a "contingency-fee basis." "Contingency-fee basis" means that you owe us nothing if we don't win money for you. But if we do win money for you, you will pay us a fee from the money we win for you.
3) Costs
If we don't win money for you, you owe us nothing for any costs we have fronted. Don't confuse costs and expenses with attorneys' fees. They're different. Depending on the strength of your case, we will advance some of the costs. Costs and expenses include filing fees, photocopy charges, postage, couriers, investigative fees, legal research, word processing, and accountant or other expert fees to figure out your damages and to look over the other side's damages estimates.
If we do win money for you, then, before you get your money, we will deduct from that money the costs we have fronted for you. Sometimes, we might have to ask you to advance a fee or cost.
Remember, we will not invest your time and our money in a case, unless we truly believe you have a good case.