Arbitration, Complaints & Discipline
Key rules on FINRA arbitration, customer complaints, and the disciplinary process for the SIE exam.
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Questions Covered in This Set
12 cards to master
Code of Arbitration Procedure covers what?
Disputes where money changes hands — customer vs. firm, firm vs. rep, rep vs. firm. A 'lawsuit substitute.'
Code of Procedure covers what?
FINRA disciplinary/enforcement actions against members — fines, suspensions, bars. Think 'prosecution.'
What must a rep do with a written customer complaint (including email)?
Promptly forward it to a supervisor/principal, who investigates and keeps a record; files kept at the OSJ.
How often are complaint statistics reported to FINRA under Rule 4530?
Quarterly — by the 15th day of the month after quarter end.
Which events must be reported within 30 calendar days?
Complaints alleging theft or forgery, felony charges, settlements over $15,000 for a rep ($25,000 for the firm).
How does mediation differ from arbitration?
Mediation is voluntary and the mediator cannot impose a decision; arbitration is binding and final with essentially no appeal.
Arbitration eligibility time limit?
Claims must be filed within 6 years of the event giving rise to the dispute.
Simplified arbitration threshold and panel?
Claims of $50,000 or less — one arbitrator, decided on the papers, usually no hearing. Over $100,000 gets a three-arbitrator panel.
Can customers be forced into arbitration?
Only if they signed a predispute arbitration agreement; customers may always choose arbitration. Class actions cannot be arbitrated.
What is an AWC?
Acceptance, Waiver and Consent — respondent settles before a complaint is filed, accepts findings/sanctions, and waives appeal rights.
Minor Rule Violation Plan (MRVP) key facts?
Fine up to $2,500 for minor infractions, with no admission of guilt.
How soon must arbitration awards be paid?
Within 30 days; unpaid awards can lead to suspension of the rep or firm.
