NCJ Number
100848
Journal
Missouri Journal of Dispute Resolution Volume: 1985 Dated: (1985) Pages: 151-172
Date Published
1985
Length
22 pages
Annotation
This study examines 41 cases to determine the efficiency of securities broker/customer arbitration and proposes procedures to counter any inefficiencies.
Abstract
The cases were arbitrated by the two self-regulatory organizations (SRO's) with the largest arbitration staffs. A significant number of the cases went to arbitration for other than good faith reasons. Some of these disputes went to arbitration because parties were unfamiliar with the controlling law. In other instances, arbitration was used because the parties did not communicate with one another in good faith or failed to examine adequately the situation generating the dispute. Arbitration was sometimes used because of parties' unwillingness to examine the merits of their cases. These inefficient uses of arbitration could be addressed by providing for attorney-advisers in the prehearing stage to advise parties on invalid legal theories and encourage the preparation of informative submissions. Another recommendation is the adoption of SRO rules requiring broker respondents to investigate the facts of disputes and communicate results in good faith to claimants. The integration of conciliation efforts into prehearing procedures would also help avoid unnecessary arbitration. 35 footnotes.