Why must an investor file arbitration with FINRA instead of with court?

Most brokerage account agreements contain pre-dispute arbitration clauses which preclude customers from pursuing nearly all their investment-related claims in court. Instead, the agreements require customers to pursue their claims against the brokerage firm in binding arbitration, typically in FINRA’s dispute resolution forum. If you choose to file a lawsuit in court instead of arbitration with FINRA, the brokerage firm can petition the court to enforce the brokerage account agreement and compel the matter to arbitration.

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