ABTL Report - Fall 2026 Edition - Flipbook - Page 5
ABTL - Los Angeles
Fall 2026
Navigating FINRA Arbitration: Lessons from the Trenches
...continued from Page 4
that appear to resonate with the panel based on each panel
member’s work experience and background.
Keep the Exhibit Record Clean and Complete
Stay Flexible and Ready
Although the forum is less formal than court in many
respects, the panel still needs a clean, accessible record.
Counsel should not assume that electronic exhibit systems,
shared folders, or hearing binders will work smoothly simply
because the materials were exchanged before the hearing.
Missing exhibits, inconsistent exhibit lists, incomplete binders,
and confusion over what has actually been admitted can slow
the hearing and distract from the merits.
FINRA hearings can evolve quickly. Due to the fact that
there are no depositions, witness testimony during the hearing
itself is the 昀椀rst occasion for the parties and their counsel
to hear the other side’s version of events. A party’s theory
of the case, for example, may differ from what is alleged in
their complaint or in any pre-hearing brie昀椀ng. Be ready to
prepare witnesses (and client representatives) in real time
for this possibility, and take advantage of planned breaks in
the proceedings to strategize about how best to adapt to any
signi昀椀cant changes. For example, if the Claimant does not
put forward any evidence to support their claims against an
individual defendant, be ready to make an oral motion for nonsuit. The panel may be willing to grant such a motion on the
spot without requiring brie昀椀ng.
Before the hearing begins, con昀椀rm that all exhibits are
Bates stamped, consistently labeled, and available in the same
form to the panel, opposing counsel, witnesses, and any remote
participants. Even in this technological age, physical exhibit
binders are very helpful to the panel. In a document-heavy
FINRA case, managing the exhibits and giving clear directions
to the arbitrators about the evidence can be a major advantage.
Consider assigning each party a different exhibit numbering
system (for example, Claimant will have 1-1999, Respondent
No. 1 will have 2000-2999, etc.).
Moreover, witness availability, panel questions, overlapping
expert testimony, and time constraints may require counsel to
adjust strategy in real time. Counsel should be prepared to
make judgment calls about whether to shorten an examination,
withdraw duplicative testimony, or reserve an issue for posthearing brie昀椀ng.
Treat the Hearing Like a Trial
FINRA Rule 12604 provides that arbitrators are not bound
by state or federal rules of evidence. See also FINRA Rule
13604 (for industry disputes). In practice, panels often apply
evidentiary rules 昀氀exibly, but admissibility remains within the
panel’s discretion. As a result, more evidence might be admitted
at the hearing than would be in a state court proceeding. The
arbitrators will assess what weight to give witness testimony
and exhibits. However, counsel may effectively limit witness
testimony and documentary evidence by asserting well-placed
objections. For example, while FINRA arbitrators may be
disinclined to grant a motion to exclude an expert witness
outright, they will con昀椀ne testifying experts through wellplaced objections to relevance and scope, essentially limiting
the expert testimony in real-time.
***
Although FINRA arbitration shares many similarities
with traditional litigation, its rules and procedures create a
fundamentally different strategic environment. The limited
discovery, restricted motion practice, and relaxed evidentiary
standards place greater emphasis on preparation, 昀氀exibility,
and hearing advocacy. Those who understand the forum’s
unique procedures and tailor their strategy accordingly will be
better equipped to present their case effectively and achieve
favorable results for their clients.
Kathy J. Huang, Gillian H. Clow, and Robia Amjad of Alston
& Bird LLP
A PowerPoint presentation can be an effective aid for
opening and closing statements. Well-designed visual aids,
including timelines that put forth your narrative, slides citing
key exhibits, and charts of damages calculations, can help
simplify complex issues and serve as valuable references
throughout the hearing and deliberations. Finally, use the
research done on the arbitrators when selecting the panel to
emphasize the themes, evidence, and level of industry detail
5
