Mediation is an informal, voluntary method of dispute resolution whereby the parties select a mediator to help them achieve a mutually agreeable settlement. It is non-binding, which means that if the parties do not voluntarily resolve their dispute in mediation, they can proceed with formal arbitration. As a practical matter, most brokerage firms do not seek to mediate a case until arbitration has been filed and a final arbitration hearing has been scheduled. However, mediation may be requested before or after arbitration has been filed.

In contrast to FINRA arbitration, the parties in mediation can select their mediator from within or outside the FINRA forum, can set parameters of their mediation, and can exert greater control over the timing and manner of mediation. The FINRA mediation program maintains an experienced roster of mediators from which to choose. FINRA reports an 80% settlement rate for the cases it processes through mediation. Depending upon the particular circumstances of an investor’s case, and the defense strategies of the brokerage firm, mediation can provide an excellent dispute resolution tool.

More information about the FINRA mediation program can be found at http://www.finra.org/ArbitrationAndMediation/Mediation/Overview/.