Claims Rise as Market Declines

By Chad Ramberg
The below chart shows 25 years of data comparing the S&P 500 against arbitration cases filed with FINRA. By doing this, we can see the historical trends of broad risk variability and how it changes given general market conditions. What we find is that there is an inverse relationship between market performance and risk of a case being filed. As the markets deteriorate, claims increase. This, of course, is to be expected. Should the market trend back down, increased investor lawsuits will follow. Now is the time to look diligently at fiduciary risk transfer strategies and ensure your firm is protected.


The data for the S&P 500 is the weekly closing price. The arbitration cases are the annual cases filed with FINRA divided by a factor of 10. The adjustment of the cases was done to bring the data series into the same range as the S&P 500. For example, in 2003 the S&P 500 closed for the year at $1,111 and the total arbitration cases filed were 8,945 and graphed at 894.5 (1/10th of the total).

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