Articles Posted in San Francisco

large_san_fransico.jpgDuring my year-end review of securities arbitration award results for San Francisco, California, I made a conscious effort to limit my analysis to investor disputes involving stockbroker misconduct and breach of fidcuciary duty.

For 2009, there was a 43% increase in the number of securities arbitration cases filed with FINRA nationwide. Based on my analysis of the two-dozen or so cases that went all the way to hearing in San Francisco, I found that customers prevailed about 37.5% of the time. On a national basis, FINRA reports that investors won 45% of the 304 cases that went all the way to hearing. Are San Franciso Bay Area investors less likely to prevail in a FINRA arbitration hearing? I don’t think so. When I look at the arbitration awards for San Francisco cases, I noticed the following factors that can lead to a poor result:

  • Investors who went to the arbitration hearing alone without an attorney did very poorly. Out of 8 arbitration cases analyzed, only one self-represented investor was awarded anything at all–the grand sum of $792 on a claim $37,500.

large_san_fransico.jpgHere are the results from my analysis of securities arbitration awards made in San Francisco, California, during the first half of 2009 before the Financial Industry Regulatory Authority (FINRA). The claimants that did the worst were the ones who handled their own cases on a pro se basis. Pro se is Latin for “on one’s own behalf.” I could find only one instance where a pro se claimant recovered anything at all during the first half of 2009. In that case, the claimant, who was asking for $37,500 in damages, was awarded a mere $792.

Excluding pro se cases, claimants who went to hearing before San Francisco arbitrators in the first half of 2009 with an attorney prevailed 37.5% of the time. This is well below the national average reported by FINRA. According to FINRA, claimants received favorable awards in 47% of all arbitration hearings held during the first half of 2009.

Another telling statistic is the amount recovered by claimants who did win. After weeding out claims with questionable or uncertain damage claims, I found that claimants who won in San Francisco received awards that averaged 59% of their claimed damages during the first half of 2009. Choosing the right arbitrators can have a large impact on the outcome of a case. In reviewing awards, I notice that some San Francisco arbitrators who sat on multiple cases consistently ruled against claimants.