2015 FINRA Dispute Resolution Statistics

By Siri Yellamraju, Spring 2016 Student Intern

When an investor has claims against their broker, one way to resolve it is to file a claim with the Financial Industry Regulatory Authority (FINRA) through their dispute resolution forum.

A total of $14,208,626 in litigation costs was saved last year by people who voluntarily engaged in Alternative Dispute Resolution, according to the Department of Justice. That’s 20,686 days of attorney time and 2,108 months of litigation avoided. The court system is notorious for being slow and having massive amounts of case back up. People often wait years before they get their money back through the courts, and this is one reason Alternative Dispute Resolution has become more and more popular recently.

FINRA released statistics through December 2015 regarding dispute resolution in its forum. In 2015: 3,434 cases were filed and 3,489 cases were closed. One of the interesting insights provided by the report is the statistics regarding how arbitration cases close — 19% after hearing, 5% after review of documents, 50% via direct settlement by parties, 9% settled via mediation, 9% withdrawn, and 8% other.

To someone who has studied law, the fact that 50% of these FINRA cases were directly settled by the parties comes as no surprise. Between the long interviews, production of documents and let’s face it- dealing with lawyers- people are driven to resolving the dispute. Our contracts professor told us a story our first year of law school that has really stuck with me. He was working on a case for months when he finally turned to the client and said, “What is it that you really want from the guy you’re suing?” The client responded, “An apology.” Our professor got him just that, and they were able to settle pretty quickly.

I think studying the law makes you realize that your job isn’t to avenge people or be someone’s superhero. Your job is to help your client sort out a mess that happened and “have their back.” These statistics reflect that people are just looking to get their money back, resolve the dispute and go about their lives. Arbitration (and mediation) is a great way to do just that.