Abstract

http://ssrn.com/abstract=1118430
 
 

Citations (1)



 
 

Footnotes (183)



 


 



When Perception Changes Reality: An Empirical Study of Investors' Views of the Fairness of Securities Arbitration


Jill Gross


Pace Law School

Barbara Black


University of Cincinnati - College of Law

April 15, 2009

Journal of Dispute Resolution, Vol. 2008, p. 349, 2008
3rd Annual Conference on Empirical Legal Studies Paper
U of Cincinnati Public Law Research Paper No. 09-12

Abstract:     
Arbitration in securities industry-sponsored forums is the primary mechanism to resolve disputes between investors and their brokerage firms. Because it is mandatory, participants debate its fairness, and Congress has introduced legislation to ban pre-dispute arbitration clauses in customer agreements. Missing from the debate has been empirical research of perceptions of fairness by the participants, especially investors. To fill that gap, we mailed 25,000 surveys to participants in recent securities arbitrations involving customers to learn their views of the process. The article first details the survey's background, explains the importance of surveying perceptions of fairness, and describes our methodologies, procedures, and survey error structure. We then present our findings, including our primary conclusions that (1) investors have a far more negative perception of securities arbitration than all other participants, (2) investors have a strong negative perception of the bias of arbitrators, and (3) investors lack knowledge of the securities arbitration process. We also offer several explanations for these negative perceptions. We conclude that customers' negative perceptions transform the reality faced by policy-makers and mandate reform of the process, including the elimination of the industry arbitrator requirement and further public deliberation on the value of the explained award.

Number of Pages in PDF File: 64

Accepted Paper Series


Download This Paper

Date posted: April 11, 2008 ; Last revised: February 2, 2010

Suggested Citation

Gross, Jill and Black, Barbara, When Perception Changes Reality: An Empirical Study of Investors' Views of the Fairness of Securities Arbitration (April 15, 2009). Journal of Dispute Resolution, Vol. 2008, p. 349, 2008; 3rd Annual Conference on Empirical Legal Studies Paper; U of Cincinnati Public Law Research Paper No. 09-12. Available at SSRN: http://ssrn.com/abstract=1118430

Contact Information

Jill Gross
Pace Law School ( email )
78 North Broadway
White Plains, NY 10603
United States
Barbara Black (Contact Author)
University of Cincinnati - College of Law ( email )
P.O. Box 210040
Cincinnati, OH 45221-0040
United States
Feedback to SSRN


Paper statistics
Abstract Views: 2,536
Downloads: 245
Download Rank: 71,859
Citations:  1
Footnotes:  183

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo4 in 0.312 seconds