Motion practice can shape the pace, pressure, and cost of a securities case long before anyone reaches trial, summary judgment, or a final hearing. In federal securities litigation, early motions often collide with the heightened pleading rules of the Private Securities Litigation Reform Act, abbreviated as the PSLRA, and with discovery limits that can freeze fact development while a dismissal motion is pending under 15 U.S.C. § 77z-1 and related provisions. In FINRA arbitration, motion practice follows a different structure, and early dismissal motions face meaningful limits under FINRA Rule 12504 and Rule 13504 guidance. Those procedural differences often create expensive mistakes when parties use a one-size-fits-all strategy.
This is one reason securities disputes can become expensive fast. According to Cornerstone Research and the Stanford Securities Class Action Clearinghouse, there were 225 securities class action filings in 2024, and in 2025 the median time from filing to settlement hearing remained about three and a half years in settled cases. Cornerstone’s 2024 filings report and its 2025 settlements analysis both suggest that procedure and timing remain central cost drivers in these matters.
Below are six common motion-practice mistakes that often increase cost and delay in securities cases, along with a practical look at why they matter.
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A common mistake is assuming a securities case follows the same early-motion playbook as a contract or business tort case. In reality, securities claims often come with special pleading rules, automatic discovery stays, and forum-specific motion limits that can make ordinary litigation instincts counterproductive.
In federal court, a Rule 12(b)(6) motion challenges whether the complaint states a legally sufficient claim under Federal Rule of Civil Procedure 12. But securities fraud claims usually involve more than ordinary notice pleading. The PSLRA imposes particularized requirements for alleged misstatements, omissions, and scienter allegations, and it includes a discovery stay during the pendency of certain dismissal motions under the federal securities statutes at Cornell’s U.S. Code collection. That changes leverage, timing, and case budgeting from the start.
FINRA arbitration works differently. FINRA states that arbitrators generally cannot act on a motion to dismiss before the conclusion of the non-moving party’s case in chief, except in narrow circumstances such as a signed release, lack of association with the account/security/conduct, or arbitration ineligibility under the six-year eligibility rule. FINRA’s motion-to-dismiss FAQ and Regulatory Notice 17-02 explain those limits in plain terms.
When lawyers or parties import the wrong model into the wrong forum, the result is often duplicated briefing, unrealistic scheduling assumptions, and strategic detours that make the matter longer and more expensive than expected. For a broader overview of how early dismissal fights and discovery interact, it helps to look at how discovery disputes and motion practice fit together at the opening stage of a case.
Another costly mistake is filing an early dismissal motion that is long on rhetoric and short on fit. In securities cases, weak motions can consume months, trigger extended briefing cycles, and educate the other side about defenses without materially improving settlement posture.
This issue appears in both court and arbitration, though the mechanics differ. In FINRA arbitration, the forum has expressly tried to discourage premature or weak dismissal motions. FINRA explains that certain early motions require service deadlines, are limited to narrow grounds, and can expose the moving party to forum fees, costs, attorney’s fees, or sanctions when the filing is frivolous or made in bad faith under its motion-to-dismiss FAQ. FINRA’s more recent Regulatory Notice 24-03 also notes clarifying changes to motion practice administration, including how motions and replies are transmitted to panels.
In federal securities litigation, a weak motion can also backfire. Securities cases already tend to involve extensive pleading-stage fights. Davis Wright Tremaine, summarizing Stanford/Cornerstone data, reported that motions to dismiss were filed in 96% of federal securities class actions from 2013 through 2022, while many cases resolved before class certification. That pattern highlights how central dismissal briefing has become to overall case economics in this area, even before merits discovery fully unfolds, as discussed in the firm’s data-focused review of securities class action trends.
An early motion can absolutely make sense in the right case. But when the filing is used as a reflex, rather than as a tightly matched response to the claims and forum rules, it often adds cost without delivering much procedural advantage.
One of the biggest budget mistakes in securities litigation is focusing on the motion itself while ignoring what the motion does to discovery timing, document preservation, and internal case preparation.
In federal private securities litigation, the PSLRA’s discovery stay is often treated as a simple pause button. It is not that simple. While discovery may be stayed during the pendency of the motion, the statute also provides that parties with actual notice of the allegations are to treat relevant materials as though they are subject to a continuing production request, which effectively raises the stakes of preservation from the outset under 15 U.S.C. § 77z-1. A party that pauses active case development because discovery is “stayed” may later face expensive collection problems, preservation disputes, or rushed productions when the stay lifts.
In arbitration, discovery is not governed by the PSLRA, but motion practice can still distort the discovery calendar. Parties sometimes overinvest in briefing disputes that do little to narrow issues while underinvesting in targeted collections, custodian identification, and document organization. That mismatch often reappears later as adjournment requests, disputes over incomplete productions, or emergency motions close to hearing dates.
This is one reason many securities lawyers treat motion strategy and discovery planning as part of the same early-case architecture rather than separate tracks. If the document plan is weak, even a well-argued motion may only postpone cost rather than reduce it.