Written by D. Daxton White• September 22, 2010• 6:56 am• Blog, Securities Fraud Articles

FINRA Arbitration Statistics

FINRA recently published statistics on the securities cases that it administers through its FINRA Dispute Resolution process. The statistics reveal that case filings are slightly down from 2009, and that the administration time for cases is slightly longer than in 2009. The statistics are also broken down to show the number of cases filed for each “type of controversy” (i.e. the number of cases filed involving margin calls, churning, unauthorized trading, suitability, etc.) and the number of cases filed for each type of investment product (i.e. annuities, mutual funds, bonds, common stocks, options, limited partnerships, etc.). Finally, the statistics offer a breakdown of how customers are fairing at hearing.

Here are the statistics published by FINRA (for more information on these statistics, visit http://www.finra.org/ArbitrationMediation/AboutFINRADR/Statistics/index.htm

New Case Filings through August:

2008	2009	2010	2010 vs 2009
3,018	4,994	3,778	-24%

Turnaround Time* (in months) through August:

	2008	2009	2010	2010 vs 2009
Overall	13.1	11.6	12.3	6%
Hearing Decisions	16.1	14.5	14.7	1%
Simplified Decisions	6.5	6.1	6.4	5%

Arbitration Cases Served by Controversy Involved

Type of Controversy*	2006	2007	2008	2009	August 2010
Margin Calls	103	45	64	128	57
Churning	257	133	212	306	189
Unauthorized Trading	242	174	248	478	288
Failure to Supervise	1,425	830	1,029	2,691	1,605
Negligence	1,619	891	1,602	3,405	1,870
Omission of Facts	588	275	1,201	2,453	1,352
Breach of Contract	1,397	953	1,658	2,802	1,490
Breach of Fiduciary Duty	2,621	1,616	2,836	4,206	2,183
Unsuitability	1,347	695	1,181	2,473	1,324
Misrepresentation	1,187	739	2,005	3,408	1,811
Online Trading	8	1	3	0	0

Security Types Involved in Arbitration Cases

Type of Security*	2006	2007	2008	2009	August 2010
Corporate Bonds	82	71	163	373	179
Certificates of Deposit	28	16	31	71	24
Mutual Funds	679	395	1,069	1,556	605
Options	155	110	149	275	114
Common Stock	1,257	790	773	1,367	623
Limited Partnerships	21	19	33	73	56
Annuities	446	243	236	300	143
Preferred Stock	35	26	115	481	166
Variable Annuities**			47	123	64
Derivative Securities**			801	607	172
Auction Rate Securities**			299	276	114

Results of Customer Claimant Arbitration Award Cases

Year Decided	All Customer Claimant Cases Decided (Hearings & Paper)	Percentage Decided of All Customer Claimant Cases Closed	Percentage (and Number) of Cases Where Customer Awarded Damages*
2005	1,610	23%	43% (687 cases)
2006	1,011	19%	42% (425 cases)
2007	671	18%	37% (245 cases)
2008	474	20%	42% (199 cases)
2009**	669	21%	45% (304 cases)
2010	555	18%	50% (279 cases)