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Investor Victories in FINRA Arbitration Cases Are on the Rise

Simms Law, P.C. June 14, 2022

Despite a decline in FINRA arbitration cases in the first half of 2019, customer victories have increased. This is good news for investors who’ve been defrauded by financial professionals. According to recently released FINRA statistics, there were approximately 1,800 new arbitration cases filed through June of this year, which is a 21% decline from last year. So far this year, nearly half of all FINRA arbitration cases have been decided in favor of investors, which is an increase when compared to the last several years. 

Why Are Investors Winning More Often? 

Experts claim that the quality of FINRA cases filed by investors has increased due to the current bull market, leading arbitrators to take a more aggressive stance against firms accused of wrongdoing. In addition, securities that are designed to chase yield are now cited more often in FINRA arbitration cases than in years past. For example, there has been an increase in cases involving real estate investment trusts and options when the first half of 2019 is compared with the first half of last year. Experts claim that these types of instruments are typically tied to investment strategies that arise from investors’ search for greater yield. Additional investments fitting this description include private equities, REITs, and variable annuities. The increase in claims involving these types of investments is related to their frequent inclusion in retail portfolios. Unfortunately, however, the increase in these types of investment products has led to an increase in fraudulent practices by financial professionals. Finally, the decrease in the total number of FINRA arbitration cases is likely due to the aforementioned  bull market. Experts note that FINRA filings are linked to the strength of the market, with investors being much less likely to sue their brokers when the financial markets are strong. Poor markets, on the other hand, lead investors to file more FINRA arbitration cases. 

What Does This Mean for You? 

If you believe you are a victim of financial fraud, you should pursue compensation, whether through FINRA or the court system. However, you shouldn’t do so without the assistance of an experienced investor representation attorney

Are You A Victim Of Financial Fraud? 

At Simms Law, P.A., one of our primary focuses is the representation of investors—including those investors who believe they’ve been the victims of financial fraud. Securities fraud usually occurs when a financial advisor or broker misrepresents the risks and key characteristics of an investment, causing an investor to purchase an unsuitable security. At Simms Law, we always take our clients’ concerns seriously and are aware of what is at stake when an investor suffers losses due to financial fraud. If you suspect that any suspicious activity has occurred in any of your investment accounts, or if you believe that you have been misled about the nature and risks of any of your investments, please contact us today for a free consultation.