Is Securities Industry Arbitration Dying?
The new FINRA statistics are always fascinating. While filings are up for 2008, “82%” FINRA says, that is an 82% increase over the fourth lowest number of new case filings since 1994. The lowest since 1994 was in 2007 at 3,238. FINRA is estimating new case filings in 2009 will eventually reach 7,750, even though as of June the new filings had not reached 4,000. Thus, FINRA is predicting for 2009 the fourth highest number of new case filings since 1994.
Why did the number of new case filing in 2007 drop so drastically? Was it because of strong market performance? Was it because of upgraded and determined compliance by the securities broker dealers? Was it because the legal community decided to leave these types of cases to specialists? Was it because the legal community thought that the system was rigged (i.e., the controversy over industry panel members and other disputes) and stopped filing cases?
We have heard anecdotal reports, and seen some news media reports, suggesting that all of these might be true, or might be the perception of at least some participants. If these, in whole or in part, are true, or perceived as true, then FINRA’s projection of new case filings for 2009 may be too high.
