Regulatory FrameworkQuestion 377 of 398
A customer and a member firm have a monetary dispute arising from the customer's account. The customer signed an account agreement containing a predispute arbitration clause. The dispute will most likely be resolved through:
a.A jury trial in federal court
b.Mediation binding on both parties
c.An SEC administrative hearing
d.FINRA arbitration under the Code of Arbitration Procedure
Explanation
Most customer-firm disputes are resolved through FINRA's Dispute Resolution forum under the Code of Arbitration Procedure, especially when a predispute arbitration agreement exists. Arbitration decisions are generally final and binding with very limited grounds for appeal. Mediation is voluntary and non-binding unless a settlement is reached.
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