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FINRA Stats, 7/16
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As we announced in SAA 2016-32, FINRA’s Office of Dispute Resolution has posted its monthly (July 2016) report on arbitration and mediation operations, as depicted by the claims and outcome statistics regarding the cases filed with the ODR facility.

New case inflow is depicted by a count of new submissions broken out by new customer filings and new industry filings. The tally for the first seven months of the year was a total of 2,146 cases – an average of about 300 new cases each month. Broken out, that’s 1,536 customer-related cases (about 72% of the new 2016 docket) and 610 intra-industry cases (28%). Last year at this time, there were just 1,942 new filings, a difference of 11% (19% for customer cases). The tally for the month of July alone was 316 new matters.

Pending, Closed and ATT

As a total of 4,718 cases remained open on the FINRA docket at the end of July – an increase of 201 cases from July 2015 – one sees that the pending case docket rose about as much as the new case docket (201 vs. 204). The number of cases concluded by the FINRA-ODR staff is down about 1% (14.9 mos. v. 14.4 months) and average turnaround time (ATT) for cases overall has risen 3% (interestingly, the ATT for two subgroups – Hearing Decisions and Simplified Decisions – are both showing decreased ATTs, so it’s the remaining matters – settlements and withdrawals – that are lengthening ATT).

Further Analysis – Case Volume & Recruiting

June’s new filing statistics were 20% ahead of the same period in 2015, yet the new submissions in July were about average for 2016. Why did the percentage increase fall to 11% in July? The answer lies in the fact that 2015 got off to a slow start (avg. 255 for 1H ’15), while the tally in 2016 took a steadier course. In July 2015, the total for the month jumped to 301, so, if the months ahead in 2016 stay steady too, the percentage lead over 2015 will drop more, as the year proceeds.

Last year at this time, we published a chart in the Arb Alert (SAA 2015-31), which showed the impact on FINRA’s Neutral Roster of the changes to arbitrator classifications occasioned by adoption of SR-FINRA-2014-028 and RN 15-18 (eff. 6/26/15). In July 2015, we showed, FINRA had lost 600-700 Public Arbitrators, but had managed, through intensified recruiting efforts and some re-classifications, to maintain its total numbers. In fact, the July numbers for Public and Non-Public Arbitrators virtually reversed from April 2015 to July 2015. At the end of July 2015, FINRA had a total of 6,399. Yet, by the end of July 2016 and by dint of its recruiting, FINRA can report a new high for recent years of 6,880 Neutrals: 3,129 Public Arbitrators (a net increase of 258) and 3,751 Non-Public Arbitrators (a net increase of 223), for a total net increase of nearly 8% (481/6,399)!

(ed: It could be the higher honoraria that are attracting new recruits, but, whatever the cause, FINRA is doing a bang-up job of getting new arbitrators on board!) (SAC Ref. No. 2016-33-01)

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