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]]> Home | Message Board Home Search Arbitration Investors Brokers Finance Law Compliance Archives NASD Arbitration Statistics – April 2002

Filings Up 16% from 2001

NASD Dispute Resolution continues to steam ahead in the processing of new arbitration filings, with almost 2,500 new submissions in the first four months of 2002. The continued growth in new arbitrations indicates that NASD-DR will easily break the 7,000 mark on an annualized basis, a figure that historically has represented the high-water mark for all securities filings at all forums.

The actual figure, 2,475 filings, compares with 2,141 filings in the four months of 2001 and 1,729 in the four months of 2000. The 16% rise over the same period in 2001 has been fairly consistent as we have checked with NASD-DR each month since the beginning of this year. Indeed, the 658 new cases recorded in April 2002 is only surpassed by the 662 filings in May 2001 and both months’ tallies exceed the upsurge in March 1999, when 647 cases were quickly filed to beat the big fee hike NASD implemented at that time.

The Dispute Resolution subsidiary has also been making inroads on the close-out side; with the heavy pace of growth over the last two years, the ability to process and close cases will be critical to the forum’s efficiency and effectiveness. Cases closed in the four months of 2002 are up 19%, with 1,922 cases closed versus 1,616 for the same period in 2001.

Mediation is down a bit from 2001 levels (330 vs. 345), but those disputants utilizing mediation are achieving very high resolution rates of late, 84% in 2002 versus only 75% in 2001.

“Margin call” cases are starting to subside from the 32% rise we saw in 2001, but “Omission of Facts” and “Unsuitability” stand out as controversy categories, as they did in 2001, with increases approaching 2-300% from 2000 levels.

So far this year, those two categories (annualized) are up 68% and 64%, respectively, from 2001’s reported level. Research analyst cases? Maybe, but on the product side, growth in common stock cases has been stable. The real outlier among the products or investment vehicles in dispute is mutual funds! Disputes involving mutual funds have rocketed 118% (annualized) above the 2001 tally and 354% above the 2000 tally. If current trends are consistent, almost one in six of the new cases in arbitration in 2002 will involve disputes relating to mutual funds No analysts there!

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