NASD Arbitration Statistics January 2004 –


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Number of filings down, and slowing


Although the surge in new case filings at NASD has continued for more than two years, 2003 ended weakly and 2004 has commenced in similar fashion. In fact, the 576 submissions recorded in January was the lowest number of filings recorded in any given month since September 2001.

Close-outs in January actually exceeded the number of new filings, a reversal from the norm, and the close-out tally of 717 was higher than the norm, too. NASD has been making in-roads in the rate of growth of its hefty and aging docket; in the past six months, it has been running at a close-out rate that exceeds 8,000 cases on an annualized basis, whereas in 2002 the final tally was 5,957. This has helped improve average turnaround time among the Simplified Decisions and keep it relatively steady in the Hearing Decisions category (17.2 mos. in January vs. 16.7 mos. for 2000).

However, settlements appear to be happening later in the process, as the overall turnaround time, which includes settlements plus cases tried to conclusion, has risen 23% in two years (15.0 mos. from 12.2 mos. since January 2002).

What might be causing that change? Directly negotiated settlements did comprise 46% of the closed cases in January 2004 (versus 36% for 2002), so direct settlements appear to be at the heart of the rising turnaround figure. On the other hand, the general trend in recent years has favored more settlements by mediation and decisions after hearing, with slightly less reliance on direct settlements.

Whatever the ultimate cause, it appears that case dynamics, as opposed to case administration, holds the answer.



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Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.

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