Remember PIABA? This is the organization that was formed about 20 years ago. Its genesis was getting a bunch of claimants’ lawyers together to take on the brokerage firms which, at the time, were fighting limited partnership cases tooth and nail. I have friends who belong to PIABA. I don’t.
So FINRA released its securities arbitration statistics yesterday. For the first 11 months of 2013, investors did imperceptibly better with a mixed panel than an all-public panel. The difference is one percentage point so the difference is insignificant.
So what does PIABA do? They weasel. The new president of PIABA, Jason Doss (whom I don’t know), is quoted as saying that the system is fundamentally flawed if he and his fellow PIABA members can’t win more than half of their cases that go to hearing. I call BS on that. I have always maintained that the numbers are skewed because the “good” customer cases get settled while the not-so-good or “bad” cases go to hearing. So these settled cases don’t count as wins or losses, just cases that go away.
What a load of garbage. It is intellectually dishonest, frankly, to take anything away from these numbers other than exactly what they say — In the last 11 months, about 43% of the people who go to arbitration win their cases to some degree. End of story. What about all the cases that settle but only go to hearing on expungement? Are those considered wins for the customer since it is likely that the customer got paid? Nope. What about the cases that settle and the arbitration is simply dismissed. Those don’t count either.
Give me a break, folks. PIABA is trying to manipulate public opinion with a terrible premise — that claimants are somehow entitled to win at least 50% of the time. That’s bogus and Mr. Doss and PIABA should know it. Oh, and PIABA claims that brokerages are more inclined to settle cases with three public arbitrators. In the last nearly 3 years, I have never had that discussion with anyone. Oh, and PIABA has no empirical proof of this either.
I guess this is why I don’t get invited to their parties. (insert sad face here)
That’s all for today. I’m Marc Dobin, non-PIABA securities lawyer in Jupiter, Florida.