Number of Financial Crisis-Related Securities Arbitration Cases Finally Declining
The financial crisis that struck in 2007 and 2008 prompted a surge of arbitration cases involving securities disputes, but according to Reuters, these cases are finally starting to draw to a close. Such disputes were required to be handled by the Financial Industry Regulatory Authority's (FINRA) arbitration system and although some cases are still being settled, most have reached a resolution.
This year alone, FINRA has processed nearly 1,190 securities arbitration claims. It is estimated that with that current rate, there could be 2,400 cases or more in 2013, which is still less than half of the 5,200 securities arbitration claims filed in 2009. 2009 was seen as the peak period for filing arbitration claims connected to the financial crisis that struck the U.S. economy, as well as the economies of several other nations around the globe.
Dev Modi, a securities arbitration lawyer in Florham Park, New Jersey, represents investors and suggests that brokers often steer investors toward bad securities investments. Such investments could include securities that become illiquid or bonds that lose their market value. According to Modi, "You don't know what bad things are going on until the market turns.” Another securities arbitration lawyer, Scott Silver in Coral Springs, Florida, stated that there is generally a six-year statute of limitations for filing a claim with FINRA for securities investment misconduct. The six-year rule is “becoming a key issue,” according to Silver, who also asserts that states have the legal right to apply shorter time limits, if desired