// Add the new slick-theme.css if you want the default styling
Arbitration case filings for
year-end 2016 reflected a 7 percent increase compared to cases filed in 2015
during the same time frame. More
specifically, 3,435 cases were filed in 2015, but 3,681 cases were filed in 2016. Of the 3,681 cases filed, 68 percent or 2,519
were customer disputes and 32 percent or 1,162 were intra-industry disputes.
Customer claims increased
by 8 percent from 2015 to 2016. Cases
proceeding through FINRA’s mediation program increased 17 percent from 2015. Approximately 80 percent of these cases
concluded with successful settlements, with the average turnaround time being 114
days. In cases that went to a final
arbitration hearing with a panel, claimants were awarded damages 41% of the
time, which was 1 percent less than in 2015.
controversy types in customer arbitrations filed in 2016 were: breach of
fiduciary duty; negligence; failure to supervise; misrepresentation; and
supervision. The top security types in
customer arbitrations filed in 2016 were: common stocks; municipal bond funds;
municipal bonds; mutual funds; limited partnerships and real estate investment
trusts or REITs.
is discouraging to see that arbitration case filings and customer complaints increased
in 2016, especially considering the continued decrease that occurred over the
previous few years. However, panels were
less likely to award damages to claimants in cases that went to final
arbitration in 2016.
As in years
past, mediation and early resolution of arbitration cases in FINRA continues to
be the norm rather than the exception.
Given these statistics, we continue to emphasize to our broker dealer
clients the importance of supervision and to our registered representative
clients the importance of documentation.
Having proper mechanisms in place for both of these ensures a stronger
defense in FINRA arbitration cases.