Partner & Co-Founder, Singer Deutsch LLP

In the aftermath of the tech wreck earlier this decade, investors filed record numbers of securities arbitrations against broker dealers. These "customer" cases alleged a panoply of misconduct by Wall Street firms, ranging from garden variety issues such as suitability and over-concentration to more unusual causes of action, including the well publicized, but generally poorly received, research fraud cases. The return of the bull market in 2003, however, led to a steep drop off in the number of cases filed. FINRA arbitrations peaked in 2004 at 8,945, and dropped to 3,238 in 2007.

While the bursting of the housing bubble has affected retail securities investors more indirectly than the tech meltdown, the contemporaneous credit crunch associated with it may nevertheless lead to a massive increase in customer FINRA arbitrations. That’s because...

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Partner & Co-Founder, Singer Deutsch LLP

Extended bull markets often lead to collective amnesia on the part of the money managers and investors. As investors chase high returns, they often ignore warning signals and make increasingly risky bets, only to suffer painful losses when the proverbial bubble bursts. The recent meltdown of the sub-prime market is the latest example of just such an occurrence. For many investors, particularly those who allocated substantial portions of their portfolio to highly leveraged hedge funds, it has been nothing short of...

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