FINRA Launches Phone Mediation

The lower-cost alternative is voluntary and open to cases involving claims of $50,000 or less

More On Legal & Compliance

from The Advisor's Professional Library
  • Anti-Fraud Provisions of the Investment Advisers Act RIAs and IARs should view themselves as fiduciaries at all times, whether they meet the legal definition or not.  Deviating from the fiduciary standard of full disclosure while courting clients may cause the advisor significant problems.
  • Advertising Advisor Services and Credentials Section 206 of the Investment Advisers Act contains the anti-fraud provision of the statute and ensures that RIAs’ advertising and marketing practices are consistent with the fiduciary duty owed to clients and prospective clients.   

The Financial Industry Regulatory Authority (FINRA) announced Wednesday that it has launched a pilot program offering parties in simplified cases pro bono or reduced-fee telephone mediation.

Participation in the pilot program, which began on Jan.15, is voluntary and open to cases involving claims of $50,000 or less, FINRA says.

“Telephone mediation is a lower-cost alternative, and would benefit dispute resolution forum users in many ways,” said Linda Fienberg, president of FINRA Dispute Resolution, in a statement. “Besides eliminating the travel and preparation costs typically associated with in-person mediation, telephonic mediation offers greater convenience and flexibility, and is a practical alternative for all parties involved.”

Parties interested in participating in the pilot can notify FINRA by visiting www.finra.org/arbitrationmediation/smallclaims. Also, FINRA says staff will notify eligible parties about the pilot program.

Mediators would serve on a pro bono basis on cases involving claims of $25,000 or less in damages. Reduced-fee mediation ($50 per hour) would be available on cases with damage claims between $25,000.01 and $50,000. FINRA says it will not charge any administrative fee for these cases.

Reprints Discuss this story
This is where the comments go.