Claris Law Legal Blogging Community

Editor: Debra G. Speyer, Esq.
Profession: Attorney

Category: Arbitration

Ameriprise brokerage firm had faced being shut down by the NASD for failing to pay an arbitration award. Under the NASD arbitration system, a claimant who wins an arbitration against a brokerage firm receives their monetary award within thirty days of the award or the firm faces being shut down by the NASD. The situation with Ameriprise is a very unusual one. Typically brokerage firms that lose in arbitration pay the award due to the claimant.

The exception is when the defendant is a brokerage firm that has gone out of business, or a small brokerage firm or an individual registered representative that does not have the deep pockets to pay. Even with the small brokerage firm, if they are in business, they will often work out payment plans. My law firm has represented investors in arbitrations involving small brokerage firms and these firms have paid the arbitration award. Investors however should investigate the background of any brokerage firm, large or small they invest with to make sure they are comfortable with that firm. Investors can go to the NASD website to obtain information about a brokerage firm.