Wednesday’s Word: Simplified Arbitration

By Dylan Donley, Spring 2014 Graduate Research Assistant

There are two basic methods of FINRA arbitration: simplified arbitration and regular arbitration. Simplified arbitration, also known as arbitration decided “on the paper,” is arbitration that is generally decided without a hearing (unless the investor specifically requests a hearing) and is based solely on the pleadings and other materials the investor and respondent submitted to FINRA. See FINRA Rule 12800. Simplified arbitration is used for claims under $50,000. If the amount in dispute increases to more than $50,000 in a simplified arbitration case, the arbitration will be administered under the regular provisions of the FINRA Rules (Rules 12400 – 12403 and 13400 – 13403). A single arbitrator will decide a case in simplified arbitration, unless the parties otherwise agree in writing.