Increase in FINRA Arbitration Cases Expected Following Market Downturn

Posted on April 9th, 2020 at 4:34 PM

From the Desk of Jim Eccleston at Eccleston Law LLC:

Experts expect the number of investor arbitration claims filed with FINRA to increase as a result of the market disruptions that have occurred from the COVID-19 pandemic.   This comes after a prolonged bull market which had seen a relatively low number of FINRA arbitration cases.  However, the recent market downturn has experts predicting an increase in FINRA arbitration cases. 

Previous market downturns were also accompanied by a spike in investor arbitration cases.  Following the dot com bubble bursting in 2000, FINRA arbitration cases spiked to 8,945 in 2003.  After the financial crisis of 2008 and 2009, arbitration cases hit 7,137 in 2009.  Conversely, 3,757 arbitration cases were filed in 2019.   While the recent market increases may seem like a positive development, experts believe that market volatility could lead to even more arbitration cases than just a down market. 

Expected to increase are claims by investors alleging unsuitable investments, high risk products and strategies, failure to allocate among various asset classes, overconcentration in particular sectors like energy and real estate, execution problems, margin liquidations, as well as employment claims by financial advisors.

The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial investors and advisors including Securities FraudCompliance ProtectionBreach of Fiduciary DutyFINRA Matters, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.

Related Attorneys: James J. Eccleston

Tags: eccleston, eccleston law, james eccleston, covid-19, finra, arbitration cases

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