Legal Definitions - Securities dispute resolution: Hearings

Definition:Arbitration hearings are a formal meeting where all parties involved in a securities dispute come together to present their case and supporting evidence. It is similar to a courtroom trial, but less formal.

During the hearing, the panel will begin with a brief statement, followed by opening statements from each party. The claimant will then present their case, including evidence, witness testimony, and experts. The opposing party will have the opportunity to cross-examine all witnesses presented. Then, the roles will reverse, and the respondent will present their evidence and witnesses, leaving the claimant a chance to cross-examine these witnesses. The panel may ask questions to clarify any issues at any point during the hearing.

Unlike in a trial, the rules of evidence that operate in the courtroom do not operate to the same extent in arbitration. Arbitrators tend to be much more flexible than judges in allowing evidence to come in.

For example, if a securities broker is accused of making unsuitable investments for a client, both parties will present their evidence and testimony during the hearing. The claimant may present statements from the broker, account statements, and expert testimony to support their claim. The respondent may present their own statements, account statements, and expert testimony to refute the claim. The panel will then deliberate and make a decision.

According to the Financial Industry Regulatory Authority (FINRA), most hearings tend to last between 3 days to a week. The length of the hearing can impact the cost, as hearing fees are calculated per day.

In summary, a securities dispute resolution hearing typically follows this timeline:

1. Swearing in of arbitrators, parties, and witnesses
2. Opening statement from each party
3. Claimants’ presentation of facts of the case to arbitrators, including testimony
4. Respondents’ presentation of facts of the case to arbitrators, including testimony
5. Presentation of any counter-claims, cross-claims, or third-party claims
6. Rebuttal evidence
7. Closing statements
8. Scheduling post-hearing submissions before closing the record
9. Arbitration panel closes the record