Survey Title: SRO Statistics 1st Qtr 1999
SAC Issue: Volume X, No. 7, pp. 9-10
Publication Date: April 1999

Award Year(s) Reviewed: 1996 - 1998
Survey Topic: Overview and discussion of SRO statistics 1996 - 1998 and implications for the securities arbitration industry. (See also SRO Statistics 1998)
Number of Charts: None

The late 90's, especially 1998, was a focal period for SRO arbitration. Many of the "schlock-house" cases had been processed through arbitration, mediation was finally taking off, and case volume was staying level as more investors than ever were entering a "hot" stock market. List selection was about to be introduced, along with substantially higher fees at the NASD. The number of active SRO forums was diminishing and the AMEX-NASD merger meant further change. With the closing of the American Stock Exchange arbitration facility, the AMEX Window (access to AAA) would cease to exist and the third largest SRO arbitration forum would disappear.

This article discusses those changes and their apparent effects on arbitration and SRO mediation, using case statistics provided by the SRO forums or derived from SAC's Award Database. The statistical analysis that guides the observations and predictions in this article were geared to the times, making it an interesting exercise to look back in retrospect at the statistical "evidence" and trends to see what events and patterns came to pass. As an example, forum costs at NASD were being raised significantly in 1998 - more than 30% on average for customers and about three times the former amounts for broker-dealers and their employees. How this might affect party selection and cause a flight to NYSE was discussed at length. As it turned out, parties proved exceptionally indifferent to the price changes and case volume at NASD increased, both absolutely and in relation to NYSE.

The late 90's also preceded in time the burst of new case filings that began in 2000 when the tech-decline hit suddenly and huge investor losses occasioned a surge in new claims. This article examines that period before the surge and gives a sense of the scene before the tech-wreck hit and changed securities arbitration in new and different ways.

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