The Financial Industry Regulatory Authority (“FINRA”) is facing an explosion of arbitration claims in the wake of recent financial frauds, reported Marcia Coyle in the March 30, 2009 edition of Law.com. Many of the claimants and potential claimants are elderly victims of securities fraud perpetrated by brokerage firms they trusted.
FINRA recently reported that it had received 1,065 claims through February 2009 versus 561 in the same period last year, which is a 90% increase. If the trend continues, FINRA expects the number of claims to reach the almost 9,000 claims that were filed in 2004 and 2004, which was the largest number in 14 years. Those claims arose out of fraudulent sales practices related to the dot.com bubble. In 2007, slightly more than 3,000 claims were filed, and in 2008, nearly 5,000.
FINRA, which is supposed to protect investors by maintaining the fairness of the financial markets, has been accused of lax oversight. FINRA, with approximately 3,000 employees, oversees nearly 5,000 brokerage firms, 173,000 branch offices and 659,000 registered securities representatives. FINRA also operates the arbitration forum that decides most of the claims brought by investors these days. While FINRA may not have sufficient resources to perform its regulatory function, there is general agreement that FINRA can handle the expected dramatic increase in its arbitration caseload.
Page Perry is an Atlanta-based law firm with over 125 years collective experience representing investors in securities-related litigation and arbitration. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 30 occasions. Page Perry’s attorneys are actively involved in representing institutional and individual investors in securities cases. For further information, please contact us.