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Von Aldo

First, Let's Get the Financial Advisors

No surprise in this news from Barron's this past Saturday: "Investors angry with their brokers are starting to get even. Or at least trying to." The story notes that securities-arbitration claims are up 65 percent in the first eight months of 2009 compared to the same period a year ago. Dispute resolutions should surpass 2004's levels, the paper says. Investors are winning more (45 percent of the time) and, in cases below $1 million, winning about half the amount they seek.

We've written about arbitration over the years, concluding that it is no longer so cheap or so fast as it used to be. Some wonder if it is even fair to clients. Congress, in a current bill, would substantially increase government and private lawsuits against advisors. The bill offers to pay bounties to whistleblowers up to 30 percent of the monetary payments by defendants. The bill would also prohibit mandatory arbitration clauses in customer contracts. It'll be interesting to see how the Investor Protection Act of 2009 turns out.

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