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Barry Ritholtz

A Legal System That Works for Wall Street

Brokerage employees and investors have to surrender their rights.
Who do the odds favor?

Who do the odds favor?

Photographer: Ben Hider/Getty Images

Today’s column is a going to be a bit technical, but stick with it. It's about litigation and gaming the system. No, we're not discussing Volkswagen’s diesel deception. Instead, we are going to look at the way some organizations seek advantages when it comes to adjudicating disputes.

In the world of investing, this comes up often. The Financial Industry Regulatory Authority (Finra) is the brokerage world’s self-regulating organization. It has run an arbitration division for a long time. More recently, the Securities and Exchange Commission expanded its own in-house adjudication forum.