New Statistics From FINRA Show Investors Prevail in Less Than Half of Cases

by Jackson Siegal

FINRA has recently revealed that only 42% of the cases that go to hearing result in “some” monetary relief for the customer. This statistic is even more concerning when you consider the fact that customers rarely recover the full amount of damages that they seek.

In turn, lawyers must now have a firm grasp on FINRA’s recovery statistics in order to adequately counsel their clients. For example, a client who is opposed to settlement may change her mind if she knew that only 23% of cases in 2013 were decided by arbitrators whereas 77% were resolved by other means. Only 18% of cases were decided after a hearing. Indeed, 52% of cases were settled by the parties prior to hearing in 2013.

Also of note, FINRA’s statistics reveal that there was a 14% drop in the number of new cases filed between 2012 and 2014. The most common type of controversy was a breach of fiduciary duty and the most common type of security involved in arbitration cases were mutual funds. Lastly of note, the average turnaround time for hearing decisions was 20.2 months for cases closed through January.

You can find FINRA’s latest statists here.