Instructions For Filing Your Statement Of Claim

1. Service of claim

Every arbitration claim filed with the NASD is mailed to the NASD's office in New York City for service upon the Respondents. Be sure to file enough copies of the Statement of Claim (SOC) for each party, arbitrator, and the NASD's file. (Don't forget to keep one for yourself. You will need to refer to it often.) If the NASD doesn't get enough copies of the SOC, they will send you a deficiency notice. Your case will not be served until the deficiency is cured (within 30 days, or your case will be dismissed without prejudice and you'll have to start over). The NASD will not make extra copies for you.

You will also have to make sure you include a check for the correct amount, made payable to the National Association of Securities Dealers. Failure to do so will also result in a deficiency notice. Checks must be made from an account held by the Claimant (a personal check for an individual or joint account, a corporate check for a corporate claimant, etc.). A filing fee schedule is available in the Code of Arbitration Procedure. Also include a notarized Submission Agreement. This is your agreement to submit your claim to arbitration. Nothing can be processed by the NASD without this form which is included in these materials.

Once you have provided the NASD with the correct information and a check, it will serve the SOC. You will receive a copy of the "service letter" sent to each respondent. This will give you the file number (very important), the name and number of the assigned NASD legal assistant, and the address for service of each respondent. It will also list the date the Answer is due.

2. Highlights of your claim

The purpose of your SOC is to tell the story of your complaint. Arbitration is fact-based, so unlike a court of law, you need not worry about putting your arguments in "legal-ese." On the contrary, the crisper and more succinct your SOC, the less likely you are to confuse the arbitrator with extraneous facts.

On the other hand, don't omit anything relevant to the cause of action. Certain causes of action (notably fraud), require certain elements to be present before a finding may be reached. You need to include all the facts you can. Beware, however, of editorializing.

The primary rule of claim-writing can be summed up in three words:

"Exhibits, exhibits, exhibits."

In simplified claims, there is generally no hearing. Your only chance to testify is on paper. No matter how lucid your story, without exhibits it is still only a story. Set against the story told by the opposing attorney (who does this for a living), you will have little chance unless you include all appropriate exhibits which help to prove your story.

As set out in the samples in this kit, your SOC should follow a storyline, beginning when the account was opened and following it chronologically. If only a certain time period is involved (as opposed to the entire account history), be sure to bracket that period with a few words of explanation, to give the arbitrator a feeling of orientation. Always be sure to date the relevant transactions; the NASD will want to make a preliminary decision as to eligibility, and without pertinent dates they will send out a deficiency notice. How much you ask for is a matter derived from the facts. Generally speaking, you are entitled to what you have lost: compensatory damages. You may also ask for filing fees; interest; and punitive damages. Like compensatory damages, the latter are entirely dependent on the arbitrator's discretion.

Certain documents must be filed with the SOC; failure to include these may result in a deficiency notice. A Submission Agreement is mandatory, signed by the Claimant and notarized. (Check each Submission Agreement for proper notarization. This is the primary reason for deficiency notices. Don't assume the notary knows what he/she is doing.)

If the account holder is a trust, estate, or a corporation, you will need to attach documents showing your authority to act on behalf of that entity. If the account is custodial for a minor, include a copy of the minor's birth certificate (assuming the minor has not reached his majority since the transaction in question).

3. The Statement of Answer

Each Respondent will have 20 calendar days to answer the SOC once it has been served. (Remember that you will be provided with this date).

One or more Respondents may call and ask you for an extension of time in which to file an Answer. This request is normally granted once. (The Respondent, in fact, may not ask you; he may go directly to the NASD, which routinely grants such requests. If this happens, you will be notified by the Respondent.) Additional requests may or may not be granted at your own discretion. Bear in mind that even if you deny a request, there may not be much you can do in the event the Answer is late.