SECURITIES MEDIATION BRIEF

FINRA Dispute Resolution Services

CASE INFORMATION

FINRA Case Number: _________________________

Mediation Date: _________________________

Mediation Location: _________________________
☐ In-Person ☐ Telephonic ☐ Video Conference

Mediator Name: _________________________

I. PARTIES

A. Claimant

Name: _________________________

Address:
_________________________
_________________________

Telephone: _________________________ Email: _________________________

Counsel for Claimant:

Attorney Name: _________________________

Firm Name: _________________________

Address:
_________________________
_________________________

Telephone: _________________________ Email: _________________________

B. Respondent(s)

Respondent 1 (Brokerage Firm)

Firm Name: _________________________

CRD Number: _________________________

Contact Person: _________________________

Counsel for Respondent 1:

Attorney Name: _________________________

Firm Name: _________________________

Telephone: _________________________ Email: _________________________

Respondent 2 (Individual Broker)

Name: _________________________

CRD Number: _________________________

Counsel for Respondent 2:

Attorney Name: _________________________

Firm Name: _________________________

Telephone: _________________________ Email: _________________________

II. NATURE OF THE DISPUTE

A. Summary of Claims

[Provide a concise summary of the claims being mediated]

_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

B. Causes of Action

☐ Breach of Fiduciary Duty
☐ Negligence
☐ Unsuitability (FINRA Rule 2111)
☐ Churning/Excessive Trading
☐ Misrepresentation
☐ Omission of Material Facts
☐ Fraud (Rule 10b-5)
☐ Unauthorized Trading
☐ Failure to Supervise
☐ Breach of Contract
☐ Margin Account Violations
☐ Other: _________________________

C. Amount in Controversy

Damages Claimed: $______________

Breakdown:

III. FACTUAL BACKGROUND

A. The Parties

Claimant's Background:

Age: _______ Occupation: _________________________

Investment Experience: _________________________

Investment Objectives: _________________________

Risk Tolerance: _________________________

Financial Situation at Time of Account Opening:
- Annual Income: $______________
- Liquid Net Worth: $______________
- Total Net Worth: $______________

Respondent's Background:

Broker's Years of Experience: _______

Broker's CRD Record (relevant disclosures): _________________________

Firm's Supervisory Structure: _________________________

B. The Account Relationship

Account Information:

Account Number: _________________________

Account Type: _________________________

Date Opened: _____________

Date Closed/Transferred: _____________

Initial Investment: $______________

C. Chronology of Key Events

D. Detailed Factual Narrative

[Provide a detailed narrative of the facts from Claimant's perspective]

_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

IV. LEGAL ANALYSIS

A. Applicable Legal Standards

1. FINRA Rule 2111 - Suitability

FINRA Rule 2111 requires that a broker have a reasonable basis to believe that a recommended transaction or investment strategy is suitable for the customer based on the customer's investment profile.

Three Components of Suitability:

1. Reasonable-Basis Suitability: The broker must have a reasonable basis to believe the recommendation is suitable for at least some investors.

2. Customer-Specific Suitability: The broker must have a reasonable basis to believe the recommendation is suitable for this particular customer based on the customer's investment profile.

3. Quantitative Suitability: A series of recommended transactions, even if suitable when viewed in isolation, must not be excessive when viewed in the aggregate.

Application to This Case:
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

2. Breach of Fiduciary Duty

A broker owes fiduciary duties to customers, including the duty of loyalty and the duty of care.

Application to This Case:
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

3. Negligence

A broker must exercise the degree of care that a reasonably prudent securities professional would exercise under similar circumstances.

Application to This Case:
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

4. [Other Applicable Legal Theories]

_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

B. Key Legal Issues

Issue 1: _______________________________________________________________________
Analysis: _________________________________________________________________________
_________________________________________________________________________________

Issue 2: _______________________________________________________________________
Analysis: _________________________________________________________________________
_________________________________________________________________________________

Issue 3: _______________________________________________________________________
Analysis: _________________________________________________________________________
_________________________________________________________________________________

V. DAMAGES ANALYSIS

A. Methodology

[Explain the methodology used to calculate damages]

☐ Out-of-Pocket Loss
☐ Well-Managed Account Analysis
☐ Market-Adjusted Damages
☐ Rescission
☐ Other: _________________________

B. Detailed Calculation

Out-of-Pocket Calculation:

Alternative Calculation - Well-Managed Account:

C. Supporting Documentation

☐ Expert report attached
☐ Trading analysis attached
☐ Account statements attached
☐ Damage calculation spreadsheet attached

VI. STRENGTHS AND WEAKNESSES

A. Claimant's Case Strengths

1. _________________________________________________________________________________

2. _________________________________________________________________________________

3. _________________________________________________________________________________

4. _________________________________________________________________________________

5. _________________________________________________________________________________

B. Claimant's Case Weaknesses/Challenges

1. _________________________________________________________________________________

2. _________________________________________________________________________________

3. _________________________________________________________________________________

C. Respondent's Likely Defenses

1. Defense: _________________________
   Response: _________________________

2. Defense: _________________________
   Response: _________________________

3. Defense: _________________________
   Response: _________________________

VII. SETTLEMENT CONSIDERATIONS

A. Claimant's Settlement Position

Initial Demand: $______________

Current Settlement Range: $______________ to $______________

Minimum Acceptable Settlement: $______________ (CONFIDENTIAL - Do not share with opposing party)

B. Factors Favoring Settlement

For Claimant:
1. _________________________________________________________________________________
2. _________________________________________________________________________________
3. _________________________________________________________________________________

For Respondent:
1. _________________________________________________________________________________
2. _________________________________________________________________________________
3. _________________________________________________________________________________

C. Costs of Continued Litigation

Estimated Costs to Arbitration:

Time to Hearing: _______ months

D. Risk Assessment

Likelihood of Prevailing at Arbitration: ______%

Expected Award Range if Successful: $______________ to $______________

Expected Value (probability-weighted): $______________

VIII. COMPARABLE CASES AND AWARDS

A. Similar FINRA Awards

Case 1:
Case Number: _________________________
Facts: _______________________________________________________________________
Award: $______________
Relevance: _________________________________________________________________

Case 2:
Case Number: _________________________
Facts: _______________________________________________________________________
Award: $______________
Relevance: _________________________________________________________________

Case 3:
Case Number: _________________________
Facts: _______________________________________________________________________
Award: $______________
Relevance: _________________________________________________________________

B. Settlement Range Analysis

Based on comparable cases and the specific facts of this matter, a reasonable settlement range is:

Low: $______________
Mid-Point: $______________
High: $______________

IX. ISSUES FOR MEDIATION

A. Key Issues to Address

1. _________________________________________________________________________________

2. _________________________________________________________________________________

3. _________________________________________________________________________________

4. _________________________________________________________________________________

B. Non-Monetary Terms

☐ Confidentiality Agreement
☐ Non-Disparagement Clause
☐ Release of All Claims
☐ No Admission of Liability
☐ Expungement Considerations (if applicable)
☐ Other: _________________________

C. Authority to Settle

Claimant's Authority:
☐ Claimant has full authority to settle
☐ Claimant requires consultation with [spouse/family/other]
☐ Limited authority: _________________________

Respondent's Authority:
☐ Representative has full settlement authority
☐ Representative has limited authority: $_____________
☐ Authority to be confirmed

X. PROPOSED SETTLEMENT TERMS

A. Monetary Terms

Settlement Amount: $______________

Payment Terms:
☐ Lump sum payment within _______ days
☐ Structured payment: _________________________

B. Non-Monetary Terms

Confidentiality:
_________________________________________________________________________________

Release:
_________________________________________________________________________________

Other Terms:
_________________________________________________________________________________

XI. CONCLUSION

A. Summary of Position

[Provide a compelling summary of why Claimant should prevail and why settlement is appropriate]

_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

B. Request to Mediator

Claimant respectfully requests that the mediator assist the parties in reaching a resolution that:

1. _________________________________________________________________________________

2. _________________________________________________________________________________

3. _________________________________________________________________________________

XII. DOCUMENTS SUBMITTED

☐ Statement of Claim
☐ Respondent's Answer
☐ Account Opening Documents
☐ Account Statements
☐ Trade Confirmations
☐ Correspondence
☐ Expert Report
☐ Damages Calculation
☐ Comparable Awards Summary
☐ Other: _________________________

Respectfully Submitted,

Date: _________________________

Signature: _________________________

Print Name: _________________________

Firm: _________________________

Counsel for Claimant

STATE-SPECIFIC CONSIDERATIONS

California

• California Corporations Code Section 25501 provides for civil liability in securities transactions
• California Civil Code Sections 1709-1710 (fraud/deceit) may support claims
• California Evidence Code Section 1119 protects mediation confidentiality
• Consider mentioning California-specific precedents if applicable

Texas

• Texas Securities Act Article 581-33 provides civil remedies
• Texas Civil Practice & Remedies Code Chapter 154 governs mediation
• Texas Deceptive Trade Practices Act may provide additional leverage
• Mediation communications privileged under Tex. Civ. Prac. & Rem. Code Section 154.073

Florida

• Florida Securities and Investor Protection Act (Chapter 517) applies
• Florida Statutes Section 44.405 protects mediation confidentiality
• Florida's elderly investor protections may strengthen claims
• Consider mentioning Florida-specific precedents if applicable

New York

• Martin Act (N.Y. Gen. Bus. Law Article 23-A) provides broad anti-fraud authority
• CPLR Article 75 governs arbitration-related matters
• New York mediation confidentiality protections
• New York common law fiduciary duty standards may be favorable

MEDIATION PREPARATION CHECKLIST

Before Mediation:

☐ Review all relevant documents thoroughly
☐ Prepare chronology of events
☐ Calculate damages using multiple methodologies
☐ Research comparable FINRA awards
☐ Assess strengths and weaknesses objectively
☐ Determine settlement authority and range
☐ Prepare opening statement
☐ Anticipate Respondent's arguments
☐ Prepare responses to expected defenses
☐ Organize documents for easy reference
☐ Confirm attendance of all necessary parties
☐ Confirm settlement authority of Respondent

During Mediation:

☐ Listen actively to opposing party's position
☐ Be prepared to adjust positions based on new information
☐ Focus on interests, not just positions
☐ Use mediator effectively as neutral facilitator
☐ Be patient - mediation takes time
☐ Document any agreements reached

After Mediation:

☐ If settled: Ensure written settlement agreement is signed
☐ If not settled: Assess what was learned for arbitration
☐ Follow up on any action items
☐ Maintain mediation confidentiality

FINRA MEDIATION OVERVIEW

About FINRA Mediation

• Voluntary: Both parties must agree to mediate
• Non-Binding: Until settlement agreement is signed
• Confidential: Discussions cannot be used in arbitration
• High Success Rate: Approximately 80% of mediations result in settlement
• Flexible: Can occur before, during, or instead of arbitration

Benefits of Mediation

1. Cost Savings: Significantly less expensive than full arbitration
2. Time Savings: Can be scheduled quickly; typically one day
3. Control: Parties control the outcome (vs. arbitrator decision)
4. Preserve Relationships: Less adversarial than arbitration
5. Confidential: Settlement terms remain private
6. Creative Solutions: More flexibility in crafting resolution

Mediator's Role

• Facilitate communication between parties
• Help identify issues and interests
• Assist in generating options
• Reality-test positions
• NO authority to impose a solution

This template is provided for informational purposes only and does not constitute legal advice. Securities mediation involves complex legal and factual issues. Mediation briefs are typically confidential and should be prepared with the assistance of qualified counsel. Consult a securities attorney before participating in FINRA mediation.