Arbitration, Limited Appeal Rights, SEC role

Arbitration, Challenging a Decision, SEC Role

The SEC cannot act on behalf of individual investors in any arbitration proceeding and cannot overturn or change an arbitrator's decision. In addition, arbitration decisions are not subject to appeal. Although you cannot file an appeal of an arbitration decision, you can file a motion to vacate, which essentially asks the court to “cancel” the decision. However, the circumstances under which state or federal courts can grant the motion are typically very limited. For more information, please go to the Federal Arbitration Act and click on §10.

If you decide to challenge an arbitration decision in federal court, the Federal Arbitration Act requires you to act quickly: you must file a motion to vacate within three months of the date the arbitrator filed or delivered the decision. Some states may have arbitration statutes that require you to file the motion in even less time.

Although the SEC cannot help individual investors with challenging an arbitration decision, we appreciate hearing your concerns about the fairness and efficiency of the arbitration process. We oversee the arbitration programs conducted by self-regulatory organizations, such as FINRA Dispute Resolution. Your views can help us make sure that the process runs more smoothly and fairly. Please visit our Complaint Center to send us your feedback.

 

We have provided this information as a service to investors.  It is neither a legal interpretation nor a statement of SEC policy.  If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.