FINRA’s arbitration filings rise almost 50% in 2009

FINRA Dispute Resolution recently posted its December 2009 statistics, providing interesting data for the 2009 calendar year.  Not surprisingly, due the 2007-08 stock market disruptions, 2009 arbitration case filings rose 43% over 2008, from 4,982 to 7,137.  At the same time, turnaround time of cases (from filing to award) happily decreased 12%, from 13.0 months to 11.5 months (and even further frmo 13.9 months in 2007).  Similarly, although not as dramatic, mediation filings increased 23%, from 459 in 2008 to 563 in 2009, and mediation case turnaround time tumbled 33% in the same time period, from 135 days to 91 days. 

Most significantly for investors, customer recovery rates — the percentage of cases decided by an arbitration panel in which an investor-claimant was awarded either some monetary or non-monetary relief — climbed back up into its historical range, reaching 45% from a low of 37% in 2007, and 42% in 2008.

It remains to be seen whether these trends will alleviate pressure on Congress and the Securities and Exchange Commission to ban mandatory arbitration of customer disputes.

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