NASD Arbitration Statistice 8/03 – Securities Law News Update, From the Securities Law Home Page


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Filings Up, Mediations Up, Paper Cases Up

At 6,163, the number of new filings exceeds the full-year tallies at NASD Dispute Resolution for all past years except 2001 and 2002. As to those two most recent years, the 8-month total exceeds the same-period figures by 23% and 36%, respectively. That brisk pace has not slackened in these first eight months, but it has not quickened yet, as many expected. That is not a bad thing at all.

The system is under a considerable strain already. Turnaround times are increasing, except in the simplified category, and the gap between new submissions and close-outs is ever-widening. Fortunately, mediation is having perhaps its best year ever, with a 19% increase over last year in cases entering mediation and a 24% increase in cases processed. Almost 1,100 disputes have been mediated in the past eight months and, yet, settlements remain high, at 82%.

Close-outs in the most recent month, August 2003, had an uptick; in fact, the 645 cases closed surpassed any previous month in 2003 and all but one previous month for the past three years. One area that has regularly contributed about 8% of the close-outs in past years has fallen by half, to about 4% thus far this year. Non-hearing or “on the papers” cases are decided under simplified procedures after an arbitrator reviews the documents. In 2,000, arbitrators decided 554 such cases, but this year the estimated total will barely break 300. Even though total close-outs for 2003 are running 13% higher than in 2002, the pace for deciding customer cases on the papers is running 27% behind last year’s pace. We can only surmise that fewer customers are agreeing to have their cases decided without a hearing, which is ironic, because the “paper” cases are currently sporting a high “win” rate of 60% for customers. (SAC Ref. No. 03-38-03)



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