What is the scope of a securities arbitration award?

Securities arbitration awards are a form of legal resolution in Texas that can be obtained when an investor feels they have been wronged by their broker or investment advisor. In Texas, a dispute is first submitted to the Financial Industry Regulatory Authority (FINRA) for mandatory arbitration. Through this dispute resolution process, a neutral third-party arbitrator, or panel of arbitrators, will examine the dispute and render a binding, enforceable decision. The scope of the award is the power of the arbitrators to award damages and other relief to the investor. This award generally includes damages for any losses and expenses plus interest. In addition, the award may include orders for equitable remedies such as rescission or other types of restitution, or orders to correct misrepresentations or correct practices. In extreme cases of misconduct, the arbitrator can award punitive or exemplary damages. The scope of an arbitration award is limited to the facts of the case and the legal issues presented in the dispute, and it may not exceed the monetary boundaries set by the parties or the arbitrator. Basically, the parties to the dispute are only awarded a remedy that will typically place them in the same position as if the dispute had never occurred. As a result, securities arbitration awards can provide a quick, efficient, and cost-effective resolution to disputes between investors and their brokers or investment advisors.

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What is the scope of a securities arbitration award?

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