Discovery Sanctions within FINRA Arbitration


Discovery Sanctions within FINRA Arbitration

Failure to comply with the discovery rules hinders the efficient and cost-effective resolution of disputes and undermines the integrity and fairness of FINRA’s forum. Parties sometimes attempt to use the discovery process to harass and burden their opponent. Arbitrators will take this into consideration when considering discovery issues.

Arbitrators have several tools available for addressing failures to comply with FINRA discovery rules. FINRA Rules provide for sanctions when a party’s failure to cooperate in the exchange of documents and information. The panel may issue sanctions against any party for failing to comply with the discovery provisions of the rules, unless the panel determines that there is substantial justification for the failure to comply; or frivolously objecting to the production of requested documents or information.

More over FINRA Rules allows the panel may dismiss a claim, defense or arbitration with prejudice as a sanction for the material and intentional failure to comply with an order of the panel if prior warnings or sanctions have proven ineffective.

Ken Strongman, MediatorAbout the Author: Ken Strongman ( has years of experience and a growing national reputation as a mediator and arbitrator.  He has successfully resolved more than a thousand disputes in the fields of construction defects, real estate, intellectual property, and employment.  He is also a Mediator and Arbitrator for FINRA.

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