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Filings Flat, 2,411 Cases for the Year

NASD STATS, May, 2000

Despite expectations that the contraction in April would bring a flood of new cases, NASD arbitration filings are fairly flat. Through the month of May, 2000, new case submissions at the NASD totaled 2,203.

That compares with 2,411 case filings at this time in 1999, a 9% decrease. True, in May the filings rose to 475 from 374 the month before, but the May number is not outside the norm. True, too, customer claims from the April decline may well be in a pre-arbitration mode. There is often a lag time before customers file, but less so when brokerage houses are chasing customers for unpaid margin deficits. Those cases are often filed quickly, yet the lack of a post-April surge in filings suggests margin problems may have been moderate and perhaps well-controlled.

Moreover, the number of online-related filings and unauthorized trading allegations remain rather low. There have only been 4 online-related cases filed, one more than last month, according to NASD statistics.

The available filing statistics do not disclose the number of margin-related claims, but unauthorized trading (a common allegation in margin liquidation cases) claims are actually lower than in the past three years.

Noteworthy is the improvement in closed case statistics. NASD new filings and closings are in relative parity and the total number of closed cases through May (2,185) rose 13% from last year. Settlements are up a bit, but the real impact on closed case figures appears to be coming from arbitrator decisions “on the papers.” Through May, the number of such decisions stood at 253, nearly as many as the 267 “on the papers” decisions rendered for all of 1999

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