What Goes Into a FINRA Statement of Claim?

A FINRA Statement of Claim is the written document that starts a FINRA arbitration. It tells the story of what happened in the account, names the broker and brokerage firm, explains which duties were broken, and states the losses and other relief the investor is asking the arbitration panel to award.

Weltz Law represents investors and registered representatives in FINRA arbitration and mediation, and every case stays in house. Our FINRA arbitration attorneys draft Statements of Claim for unsuitability, churning, unauthorized trading, misrepresentation, and failure to supervise cases through the firm's FINRA claims practice. This guide walks through each part of a Statement of Claim and why it matters to the rest of the case.

What Is a FINRA Statement of Claim?

A FINRA Statement of Claim is the opening document in a FINRA arbitration. It is a written narrative that lays out the facts of the dispute, the claims against each respondent, and the relief requested. FINRA serves it on the broker and brokerage firm, and the arbitration panel reads it before anything else in the case.

The investor who files is called the claimant. The brokerage firm and any individual broker named are called respondents. Most brokerage account agreements require customers to bring disputes to FINRA's arbitration forum, so the Statement of Claim is usually the first formal step after a loss.

The Statement of Claim does more than start the case. It frames every issue the panel will consider at the final hearing. Facts and claims left out at the start can be harder to raise later, which is why the drafting stage deserves careful attention. For an overview of the whole forum, see our page on what FINRA arbitration is.

What Information Goes Into a FINRA Statement of Claim?

A strong FINRA Statement of Claim covers who the parties are, the investor's background and goals, how the account was handled, what the broker recommended or did, which duties those actions broke, and the specific damages requested. It reads as a clear, dated story that a panel can follow without outside explanation.

Most well-built Statements of Claim include these core parts:

• The parties: The investor's name and the names of each brokerage firm and registered representative involved, matching the BrokerCheck record.
• The investor's profile: Age, work history, income, net worth, investment experience, and goals such as retirement income or preserving principal.
• The account history: When the account opened, what the new account forms said, and how the investments changed over time.
• The misconduct: The specific recommendations, trades, statements, or omissions at the center of the dispute, with dates.
• The claims: The duties each respondent broke, such as the suitability and best interest standards or the firm's supervision duty.
• The damages and relief requested: The losses claimed and any request for interest, costs, fees, or punitive damages.
• Key supporting documents: Exhibits such as statements, emails, or account forms that back up the story.

Which Claims Should a FINRA Statement of Claim Include?

A FINRA Statement of Claim should include every claim the facts support against each respondent. Common claims include unsuitable recommendations, negligent misrepresentation or omission, unauthorized trading, churning, breach of fiduciary duty, breach of contract, and failure to supervise. Naming the firm's supervision failures alongside the broker's conduct is often central to customer cases.

Each claim should tie directly to facts. A claim that a recommendation was unsuitable should explain why it clashed with the investor's age, risk tolerance, or goals. A churning claim should point to trading patterns, such as the turnover ratio, which measures how many times the account's value was traded in a year, and the cost-equity ratio, which shows how much the account had to earn just to cover commissions and fees.

Claims against the brokerage firm matter as much as claims against the broker. Firms have a duty to supervise their registered representatives, review trading for red flags, and respond to customer complaints. Our pages on unsuitable investments, churning, and failure to supervise show how each of these claims is built.

How Should a Statement of Claim Describe Damages?

A Statement of Claim should state the amount of losses claimed and explain how they were measured. Panels may consider several damages theories, including out-of-pocket losses, well-managed account damages, and market-adjusted damages, plus interest and costs. In some cases, a claim may also request punitive damages or fees, which must be requested in the filing.

The main damages categories panels review include:

• Out-of-pocket losses: The difference between what the investor put in and what the account is worth now, after withdrawals.
• Well-managed account damages: The gap between actual results and what a suitable portfolio would likely have earned over the same period.
• Market-adjusted damages: Losses measured against a relevant market benchmark to separate misconduct from general market moves.
• Interest: Interest on the losses from the date of harm.
• Costs and fees: Forum fees and, in some cases, attorneys' fees when a contract, statute, or the parties' requests allow them.
• Punitive damages: Available in some cases involving especially serious conduct. Our punitive damages page covers how these requests work.

Damages analysts or forensic accountants often help calculate these figures, especially when an account held many products or had heavy trading.

What Documents Are Filed Along With the Statement of Claim?

Along with the Statement of Claim, the claimant files a signed Submission Agreement and pays a filing fee, usually through FINRA's online DR Portal. The Submission Agreement lists the parties and confirms they will follow FINRA's arbitration process and abide by the award. FINRA then serves the initial claim on the respondents.

The Submission Agreement must list the same parties named in the Statement of Claim. When filing through the DR Portal, the claimant also completes an online claim information form and uploads supporting documents. The filing fee is based on the amount claimed, and FINRA can defer some or all of it for an investor who shows financial hardship.

If the filing has deficiencies, such as a missing signature or an unpaid fee, FINRA gives the claimant a chance to fix them. If the problems are not cured within 30 days, FINRA closes the case without serving the claim. Once the claim is properly filed, FINRA serves it on each respondent, and after that, the parties serve later documents on each other through the portal.

Who Should Be Named as a Respondent in a Statement of Claim?

A Statement of Claim usually names the brokerage firm where the account was held and the registered representative who handled it. If the broker changed firms during the relevant period, earlier firms may also belong in the case. Naming the right respondents at the start matters, because adding parties later creates delay.

Brokerage firms are FINRA members, so customers can bring their claims against them in the FINRA forum. Individual brokers are associated persons of those firms, and they can be named too. A broker who left the industry may still be named, and our post on filing against a broker who already left the firm explains how that works.

The BrokerCheck record helps confirm employment dates, firm names, and prior disclosures. Form U4, the registration form every broker files, and Form U5, the form a firm files when a broker leaves, often show which firms supervised the broker during the period at issue.

How Does the Claim Amount Affect the FINRA Arbitration Panel?

The amount requested in a FINRA Statement of Claim decides how many arbitrators hear the case. Claims of $50,000 or less go through simplified arbitration with one arbitrator. Claims over $50,000 up to $100,000 get one arbitrator unless the parties agree otherwise, and claims over $100,000 or unspecified claims get three arbitrators.

Simplified arbitration is usually decided on written submissions, unless the customer asks for a hearing. In three-arbitrator cases, FINRA sends the parties lists of potential arbitrators, and the parties strike and rank names. Customers can choose a panel made up only of public arbitrators, meaning arbitrators without recent ties to the securities industry.

FINRA holds hearings at 69 locations across every state, the District of Columbia, and Puerto Rico. The hearing location is generally the one closest to where the customer lived when the events happened.

What Happens After FINRA Serves the Statement of Claim?

After FINRA serves the Statement of Claim, each respondent has 45 days to file an answer listing its defenses. The parties then select arbitrators, attend an initial prehearing conference to set the schedule, exchange documents under FINRA's discovery guide, and move toward mediation where it fits or a final hearing and a panel award.

Our FINRA arbitration attorneys handle these cases in stages, and the Statement of Claim shapes each one:

• First review: A close look at the account history, the losses, and whether the six-year eligibility window is open.
• Records gathering: Collecting new account forms, statements, trade confirmations, emails, and complaint letters.
• Statement of Claim: Drafting the narrative, claims, and damages request, then filing with the Submission Agreement.
• Arbitrator selection: Reviewing arbitrator disclosures and ranking the lists FINRA provides.
• Discovery: Exchanging the documents listed in FINRA's discovery guide, a standard list of records firms and customers usually produce.
• Prehearing conference: Setting deadlines and hearing dates with the panel.
• Mediation: A voluntary, confidential negotiation with a neutral mediator where the case fits.
• Final hearing and award: Presenting witnesses and documents, after which the panel issues a written award.

Our step-by-step guide to what happens during FINRA arbitration covers each stage in more depth.

What Mistakes Can Weaken a FINRA Statement of Claim?

The most common mistakes are filing too late, leaving out a responsible firm, describing losses vaguely, skipping claims the facts support, and writing a narrative that buries the key dates. A Statement of Claim that is unclear or incomplete gives the respondents room to reframe the story before the panel hears any evidence.

Timing is the first issue. FINRA's eligibility rule generally allows customer claims to be filed within six years of the event that gave rise to the claim, and state time limits may also apply. Our post on FINRA filing deadlines explains the six-year window.

Tone matters too. A Statement of Claim that reads as angry or speculative is less persuasive than one built on dates, documents, and plain facts. Panels respond to a clear timeline that shows what the broker knew, what the investor was told, and what happened to the account next.

Can an Investor Write a FINRA Statement of Claim Without Representation?

An investor can file a FINRA Statement of Claim without representation, and FINRA accepts filings from customers who represent themselves. Brokerage firms, however, typically have counsel who handle these cases regularly. Without help, investors may miss claims, respondents, or damages theories that shape the rest of the arbitration.

Investors representing themselves who have not registered for the DR Portal can file by mail with FINRA's New York office. FINRA staff can explain the process but cannot give legal advice about the merits of a claim.

Our posts on filing a FINRA claim without representation and whether you need help with FINRA arbitration cover the tradeoffs in more detail.

How Can Weltz Law's FINRA Arbitration Attorneys Help With a Statement of Claim?

Weltz Law's securities arbitration team reviews account records, identifies the claims and respondents the facts support, and drafts Statements of Claim built for the FINRA forum. Reach out to Weltz Law to talk through your account history, the records you have, and whether a FINRA arbitration claim fits your situation.

Sources

• FINRA: FINRA's Arbitration Process
• FINRA: Filing a Claim FAQ
• FINRA: What to Expect in Arbitration