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Securities Mediation

Securities mediation is intended to resolve disputes without going to court or official arbitration. During the mediation process, claimants can control the outcome of their dispute before a decision is rendered by a judge or arbitration panel. Securities mediation is often used to resolve disputes with brokerage firms or financial advisors, and it is much like a settlement conference in a court case.

The attorneys at Silver Law Group have extensive experience representing investors in both court-ordered and Financial Industry Regulatory Authority (FINRA) mediations. In fact, our managing partner, Scott Silver, has participated in hundreds of mediations in his career. In addition, he has worked with many of the top mediators around the U.S.

How Does Securities Mediation Work?

Generally voluntary, informal, and non-binding, mediation is a process where each party can tell their story to an impartial mediator. Because the parties choose a mutually-agreeable mediator, this gives them a lot of control in the process. They will also need to agree on the time and location of the session and the terms under which the dispute is resolved.

A mediator, however, doesn’t have any actual authority. This means that the parties are not obligated to enter into a settlement at the end of the mediation conference. At this point, the arbitration or lawsuit will continue and there will not be any disclosure that either party was willing to compromise and take less money. If the mediation is successful, the client avoids the risk of arbitration and litigation and the costs involved, which can be high.

According to FINRA, “the mediation program has achieved an 80% success rate — parties who mediate in the forum resolve four out of every five cases.” Silver Law Group utilizes creative and aggressive mediation strategies and have helped many of our clients to quick, satisfying, and cost-effective resolutions.

The Securities Mediation Process

Unlike arbitration or a trial, mediation is a much less formal process. The mediator is selected based on his or her skills that are specific to the issues related to the dispute. The mediator’s role is to guide the parties to a resolution.

Over the course of separate and joint sessions, the mediator will assist in defining the issues in the dispute and help each party understand the other side’s position and the weaknesses in their own position. In addition, a mediator may discuss what he or she thinks the outcome would be in a hearing if the two parties could not reach a settlement.

Typically, mediators begin with a joint session. Introductions will be made and the rules of engagement and the agenda will be set. The session will start with both parties’ lawyers speaking to the litigants on the opposing side. This helps define the issues and positions. After joint sessions, the parties will move to separate rooms. The mediator will then carry offers, counter offers, demands, and proposals between each side.

Because there is no traditional discovery, this allows clients to be actively engaged throughout the process, as opposed to just lawyers negotiating. There is also no cross-examination, which is standard in an arbitration hearing.

The mediator does not have the authority to decide the outcome of the process or make the parties resolve their dispute. Until parties reach an agreement, mediation is non-binding. If the dispute can’t be resolved, the claimant can pursue arbitration or other legal recourse.

If you are having a dispute with a broker or a brokerage firm, the Silver Law Group can help you figure out whether securities mediation, arbitration, or some other legal action can help you solve it. Contact us for a free consultation.



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