NASD Dispute Resolution Inc. reports that it saw a 24% increase in cases filed from 2000 to 2001.

Some of the most common allegations made in these claims were negligence, misrepresentation, unsuitable recommendations, and failure to supervise. “Both investors and firms used NASD Dispute Resolution in record numbers in 2001, and we are pleased that our arbitration and mediation forums remain important tools for investors and firms to use to settle disputes,” said Linda Fienberg, president of the group. “While 2001 has raised the bar for our organization, our roster of quality arbitrators and mediators combined with technological advances, has allowed us to continue to process cases fairly and efficiently.”

The 2001 statistics show 7,088 new claims filed, up from 5,725 in 2000. Of the 7,088 cases filed with NASD Dispute Resolution, 6,915 were filed as arbitration claims and an additional 173 began as mediations. The number of claims involving mutual funds increased by more than 100% over the previous year.

In cases brought by investors, arbitrators awarded damages in 2001 totaling US$97 million, US$15 million of which was for punitive damages, compared to US$76 million and US$21 million, respectively, in 2000. However, more than 60% of all claims were resolved between the parties before reaching an arbitration award.

In 2001, the mediation forum closed 1,262 cases with 77% of the cases reaching an agreement. In the past six years, parties have used the mediation process in over 6,000 cases with approximately 80% resulting in an agreement between the parties.