What is the standard of proof used in securities arbitration?

Securities arbitration law in Washington is designed to provide an efficient and cost-effective way for investors and financial firms who are parties in a dispute to resolve their differences. The standard of proof used in securities arbitration is a preponderance of the evidence. This means that the arbitrator must find that the evidence presented by one side is more likely to be accurate than the evidence presented by the opposing side when making a decision. For example, if an investor brings a claim that a financial firm engaged in fraud, the investor must demonstrate that it is more likely than not that the financial firm did engage in fraud. The standard of proof in securities arbitration is less than the standard of proof in a criminal or civil court, which is beyond a reasonable doubt and clear and convincing evidence, respectively. Arbitration is an alternative to a court trial and is typically much quicker and less expensive. As a result, the standard of proof is less rigorous since the goal of the arbitration process is to protect each party’s interests in a timely and cost-effective manner. The standard of proof used in securities arbitration serves an important purpose in providing investors and financial firms with a well-defined standard of evidence while providing a less expensive and time consuming alternative to a court trial. It also ensures that parties are fairly treated and that decisions are based on facts and evidence presented in the case.

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What is the standard of proof used in securities arbitration?

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