FINRA Arbitration In 2026 And Beyond: Key Trends, Notable Awards, And The Road Ahead

The FINRA arbitration forum remains the primary venue for resolving disputes between investors and the broker-dealers and investment advisers who serve them. Over the past twelve months, the forum has produced several landmark awards that captured the attention of the financial services industry, while simultaneously launching the most comprehensive review of its arbitration rules in decades. For broker-dealers and investment advisers navigating this environment, understanding the current state of play is essential to managing risk, evaluating litigation exposure, and preparing for a regulatory landscape that may look markedly different by the end of 2027.

This article surveys the key trends in FINRA arbitration filings, award outcomes, and regulatory developments over the past year and offers informed projections for the period ahead.

Case Filing Volumes and Resolution Trends

FINRA’s Dispute Resolution Services operates one of the largest securities arbitration forums in the world, drawing on more than 8,000 arbitrators to resolve customer, industry, and employment disputes. According to FINRA’s own Dispute Resolution Statistics, 3,607 total arbitration and mediation cases closed in 2024, with 84 percent of customer arbitration cases resolved through settlement or dismissal prior to final hearings. The average case closed in 12.5 months.

Filing volumes, however, have declined, perhaps due in part to a generally well-performing stock market. FINRA’s published filing data show that total new case filings fell to approximately 2,469 in 2024, well below the historical annual range of 3,000 to 4,000. Early 2025 filings remained relatively low, consistent with the trend FINRA has noted in The Neutral Corner, its quarterly newsletter for arbitrators and mediators. Filings rounding out 2025 generally matched 2024, suggesting that the post-pandemic spike that motivated a surge in filings has subsided.

Resolution timelines remain a central consideration for any firm evaluating arbitration exposure. FINRA reports that written-submission (paper) cases close in approximately 7.1 months, while merits-hearing cases average 16.6 months, and the average case overall closed in 12.5 months in 2024. Under FINRA Rules 12303, 12401, 12600, and 12602, claims of $50,000 or less proceed on written submissions alone; claims between $50,001 and $100,000 are decided by a single arbitrator following an in-person hearing; and claims exceeding $100,000 are heard by a three-arbitrator panel.

Claim Types, Damages Awarded, and Notable Outcomes

Customer win rates have fluctuated in recent years. FINRA’s published results for customer claimant award cases show that the share of cases in which customers recover has generally ranged from 30 to 40 percent over the long term, dipping below 30 percent earlier in this decade before recovering toward 30 percent more recently. The rate at which customers prevail continues to draw close attention from firms and investors alike, and it shapes how both sides assess settlement value. Notably, FINRA considers a “win” a case in which the claimant recovers any money, regardless of the total alleged losses at issue in the claim.

FINRA’s Regulatory Notice 26-06 provides additional granularity. In 2025, 140 customer arbitration cases decided by three-arbitrator panels closed by award. Of the 109 cases decided by all-public panels, customers received damages in 35 percent (38 cases). Of the 31 cases decided by majority-public panels, customers received damages in 29 percent (9 cases).

Two awards from 2025 stood out for their size and their implications for the broader punitive damages debate. In February 2025, a FINRA panel ordered UBS Financial Services and broker Andrew Burish to pay $92.2 million to nine investors who alleged he promoted an unsuitable, aggressive short-selling strategy involving Tesla stock. As reported by AdvisorHub and confirmed by court filings, the award comprised $23.1 million in compensatory damages and $69.1 million in punitive damages. U.S. District Judge Stephanie M. Rose subsequently rejected UBS’s effort to vacate the award, finding the panel did not exceed its authority. The claimants are entitled to 6.13 percent post-judgment interest from February 28, 2025.

In March 2025, a FINRA panel ordered Stifel, Nicolaus & Co. to pay $133 million in connection with former broker Chuck Roberts’s handling of the Jannetti family’s investments. As reported by AdvisorHub and WealthManagement.com, the panel found Stifel had “actual knowledge of the wrongfulness of the conduct.” A federal court in the Southern District of Florida confirmed the award in 2026, finding the panel had not exceeded its authority; Stifel has stated it will appeal. The firm continues to face additional Roberts-related cases seeking at least $40 million in aggregate.

The Punitive Damages Debate

These outlier awards have intensified an industry debate over the role of punitive damages in securities arbitration. FINRA reports that arbitrators have awarded punitive damages in only about 3 percent of all awards rendered from March 1988 through December 2025. FINRA rules do not permit pre-dispute customer arbitration agreements to limit arbitrators’ ability to award punitive damages where governing law otherwise authorizes them.

Stifel has led advocacy for reform. SIFMA similarly has recommended that FINRA modify its rules to permit firms and customers to agree contractually to limit punitive damages, even where state law would allow such awards, in the interest of promoting consistency and predictability given the limited appellate rights available in arbitration. Investor advocates have pushed back vigorously. The Public Investors Arbitration Bar Association, known as “PIABA,” has argued that investors already win fewer than 30 percent of decided cases and that further limiting available remedies would tilt the forum against claimants.

Anticipated Developments: Regulatory Notice 26-06 and FINRA Forward

On March 2, 2026, FINRA issued Regulatory Notice 26-06, a sweeping request for public comment on modernizing its arbitration rules, guidance, and processes. The Notice forms part of the broader “FINRA Forward” modernization initiative. Comments were due by May 1, 2026, and the comment period has now closed.

The scope of Notice 26-06 is broad. As set out in the Notice itself and reported by Global Banking & Finance, FINRA puts nearly every core feature of the arbitration forum on the table for potential revision. Topics include forum selection (whether parties may contractually opt out of FINRA arbitration for certain high-value or institutional claims), the six-year eligibility rule under Rule 12206, dispositive motion practice, arbitrator qualifications and selection, discovery management, hearing management, punitive damages, award publication, unpaid awards, and certain employment-related claims.

On punitive damages specifically, FINRA asked whether additional safeguards are appropriate, including bifurcation of liability and damages phases, heightened evidentiary standards, mandatory explained decisions, enhanced arbitrator qualifications for cases involving punitive claims, or the creation of an internal appellate process. These questions reflect FINRA’s awareness that the UBS and Stifel awards have generated calls for structural reform.

SIFMA’s comment letter supports permitting agreements to resolve narrow categories of claims outside the FINRA forum, including high-value, institutional, and intra-industry disputes. If adopted, such a change could substantially alter the calculus for broker-dealers evaluating arbitration risk in large-dollar matters.

FINRA has already taken steps to strengthen other aspects of the forum. The organization has enhanced its customer-dispute expungement process under Rule 2080, which, for disclosures involving customer complaints and other investment-related conduct, requires proof of factual impossibility, lack of involvement, or falsity. It has also reinforced rules governing the payment of awards; under FINRA rules, a respondent must pay a monetary award within 30 days. Unpaid awards remain a concern, though FINRA’s statistics indicate that most unpaid customer awards involve inactive firms or brokers, and claimants bear the burden of collecting awards themselves, as with court judgments.

Looking Ahead

The coming year will prove pivotal for the FINRA arbitration forum. As FINRA evaluates the comments received in response to Notice 26-06, broker-dealers and investment advisers should anticipate proposed rule changes that could alter forum selection options, punitive damages exposure, discovery obligations, and eligibility timeframes. Firms that proactively assess how these potential changes interact with their existing customer agreements, compliance frameworks, and litigation strategies will be best positioned to adapt.

In this evolving landscape, experienced counsel who understand both the procedural mechanics of FINRA arbitration and the strategic implications of regulatory change can provide meaningful advantages. Whether the challenge involves defending a high-stakes customer claim, navigating punitive damages exposure, pursuing or opposing expungement, or preparing for the structural reforms that FINRA Forward may bring, thoughtful legal guidance remains indispensable for broker-dealers and investment advisers committed to protecting their interests and their clients’ trust.

Shustak Reynolds & Partners, P.C. focuses its practice on securities and financial services law and complex business disputes.
We represent many investment advisors, financial professionals, broker-dealers, registered representatives, investors and businesses.
Attorney George C. Miller can be reached in the firm’s San Diego office at (619) 696-9500.