UNIT 05.02-001 Flashcards
If mediation fails, the dispute proceeds to arbitration. Under what circumstances may a mediator then serve on the arbitration panel?
None
Mediators may not serve in any subsequent arbitration.
Who should handle a written complaint from a customer?
A firm principal
All written complaints must be handled by a firm principal. There is no FINRA Department of Complaints.
FINRA encourages members in a monetary dispute to attempt to settle the disagreement before entering into arbitration. This process is called
mediation.
In mediation, the parties attempt to work out a resolution to the dispute with the help of a third-party mediator. Mediation is nonbinding, and either party may walk away from the attempt.
A record of a written complaint that is withdrawn by the customer the same day must be kept for how many years?
Four years
These records are maintained for four years after complaint resolution.
One of the benefits of using arbitration to settle disputes between member firms is that it
is relatively inexpensive.
Arbitration is a method for settling disputes between member firms that is less costly than litigation. In addition, all decisions are final and binding on all parties.
A customer who participates in a FINRA arbitration hearing would expect that
the award will be stated in _____ and rendered to the claimant within ____ days.
the award will be stated in writing and rendered to the claimant within 30 days.
All awards through the Code of Arbitration Procedure must be made in writing and rendered to the claimant within 30 days. Awards under arbitration are binding on all parties and may not be appealed. Customer arbitration panels must include either a majority of public arbitrators or all public arbitrators.
FINRA may take which of the following actions against members who violate the Conduct Rules?
Expulsion
Fine
Members or employees of members found to violate the Conduct Rules can be subject to suspension, expulsion, barring, fines, or any other procedural penalties deemed to be appropriate. FINRA, other SROs, and the SEC do not have the authority to arrest, indict, or convict.
Which of the following methods of providing access to FINRA rules for a customer would not be acceptable?
Delivering a copy to the customer’s home for a reasonable fee
A firm may not charge for this access.
When must a FINRA member firm make a copy of the FINRA rules available to customers?
Upon the customer’s request
A firm must make the rules available to a customer upon request.
Your firm is in a serious securities dispute with another FINRA member firm. The director of arbitration has arranged for representatives of the two firms to meet and discuss the matter first in the presence of someone from FINRA, in the hope of reaching an agreement. If agreement is not reached, the matter must go to
_________ hearing.
an arbitration hearing.
How are disputes handled? Arbitration, never court. The first step, shown here, is mediation, but when that doesn’t work, we arbitrate.
