Florida Supreme Court Decreases Statute of Limitations on Securities Arbitration Disputes
According to a recent ruling by the Florida Supreme Court, Florida’s securities arbitration cases now have a reduced statute of limitations. In the limits set by the ruling, securities arbitrators must now allow four or two years for investors to file a securities arbitration complaint with the Financial Industry Regulatory Authority (FINRA), depending on the type of claim filed. This limitation is reduced from the six years that was previously allowed.
The ruling came in favor of Raymond James Financial Services, Inc., who sought to avoid arbitration against a group of investors based on investment activity that occurred between 1999 and 2005. The investors filed their claim in 2005; however, Raymond James Financial Services disputed the arbitration based on the fact that it was filed in Florida—a state that has a four-year deadline for cases involving negligence and a two-year deadline for cases involving securities fraud.
The Florida Supreme Court ruled in the investment company’s favor, stating that the statute of limitations should be four or two years (both of which had passed), per Florida law, rather than the six-year FINRA statute. Paul Matecki, attorney for Raymond James, stated, “We are very pleased with the result and believe the court made the correct interpretation."
However, Scott Ilgenfritz, president of the Public Investors Arbitration Bar Association, stated that the ruling was “an unfortunate decision for investors in Florida for those who have claims that arise under Florida law." His concern echoes that of other groups who worry that the case in Florida could set a precedent for other states facing similar disputes. While states have their own statutes of limitations for court cases, the consensus as to whether that same limitation applies to arbitrated cases remains divided.