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Securities, Options and Futures Consultants

Securities Mediation ...

Mediation is often the first method to be employed in investor disputes that cannot be resolved through direct negotiation with the investment broker or brokerage firm, especially given its lower cost. This informal, voluntary and non-binding process involves the participation of a neutral, third party mediator with training in negotiation techniques and dispute resolution, who attempts to craft a solution that is acceptable to all parties involved. Unlike arbitration or litigation, mediation does not impose a resolution but works toward mutually agreeable terms of settlement. On occasion, mediated disputes will include relief that is not available in arbitration or litigation.

By its very nature mediation is both flexible and creative, with any given case fashioned on the needs of the disputants and the personal style of the mediator. Typically, the parties will meet face-to-face in the company of the mediator to present their views of the issues at hand while relying on the mediator to maintain focus and civility in the discussions. After mutual presentations, the parties will meet privately and separately with the mediator, who will convey questions and clarifications, proposals, offers and counter-offers until, if successful, the matter is resolved to everyone’s satisfaction. Even when settlement is not reached, the exercise can be useful in identifying a limited range of unresolved issues for subsequent arbitration or litigation.

With the process designed to be cooperative and less adversarial, the client has the option to negotiate directly on his own behalf without benefit of legal counsel, a move that should not be encouraged. A competent legal adviser should be prepared to deal with false contentions as to what is likely to happen at arbitration, or what a particular claim is worth, and promptly stop brow-beating of his client to accept a low settlement offer should it occur. In addition, a securities mediation expert witness can be of significant value. In attending mediations, Market Consulting Corporation now takes examples of previous awards to illustrate that it has obtained large arbitration awards in the past (greater than $1 million dollars), that recovery of a client’s complete loss is possible in arbitration, and that recovery of attorney’s fees and other costs including expert costs is also possible in certain cases.

See Securities Arbitration

See Compulsory Arbitration: Its Impact on the Efficiency of Markets (PDF)