What is the standard of proof used in securities arbitration?

Securities arbitration is a process used to resolve disputes between investors and their financial professionals related to investments. It is a form of alternative dispute resolution, which means that it happens outside of the traditional court system. Since it is not a court proceeding, there is no jury and the decision is made by a panel of arbitrators, usually three people. In securities arbitration, the standard of proof is the “preponderance of the evidence.” This means that the case needs to be proven to be "more likely than not" to be true, or greater than 50 percent. In comparison, in a civil court proceeding, the standard of proof is higher—clear and convincing evidence—meaning that it has to be highly probable that the case is true. The standard of proof in securities arbitration is intended to provide a fair and efficient process for resolving disputes between parties. It also protects investors by allowing them to recover damages when the broker or investment firm has acted in an improper manner. The use of the preponderance of the evidence standard thus allows the investor to prove their case with less evidence, making it easier for them to be successful. Ultimately, the standard of proof in securities arbitration is a necessary part of the process to ensure a fair and equitable outcome for the investor. It is a key element of the dispute resolution process in California and should be thoroughly understood by those considering securities arbitration.

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What is the standard of proof used in securities arbitration?

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