If, however, you or your broker cannot resolve the matter, there are effective alternative dispute resolution mechanisms available to you, including mediation and arbitration. This forum handles more than 80 percent of all securities arbitration claims filed involving customers of brokerage firms and disputes between brokerage firms and their employees. Mediation and arbitration are nonjudicial methods of resolving disputes between two or more parties. Any type of dispute, claim, or controversy arising out of your business dealings with a brokerage firm may be resolved in arbitration or mediation. Arbitration is a dispute resolution mechanism in which an impartial person or panel determines liability and whether parties are entitled to recover damages.
Arbitration is final and binding, subject to review only on a very limited basis.
Parties also may agree to mediate before a formal complaint in arbitration is filed. Mediation can also be initiated at any stage of the arbitration process. Mediation is an informal, voluntary process in which an impartial person, trained in facilitation and negotiation techniques, helps the parties reach a mutually acceptable resolution of their dispute. What distinguishes mediation from other forms of dispute resolution is that the mediator does not impose a solution but rather works with the parties to create their own solution, swiftly and inexpensively. Generally, dispute resolution methods such as mediation and arbitration are faster and less expensive than a state or federal lawsuit.