What Did Your Brokerage Firm or Investment Adviser Do Wrong With GWG
Published On: June 16, 2021

Chicago-based Stoltmann Law Offices has represented investors who’ve suffered losses from brokers and advisers in FINRA, AAA, and JAMS arbitrations for over fifteen years. One of the biggest problems with resolving investor or consumer complaints is that people are forced to go through a mandatory arbitration process. While this system avoids having to go to court – and can be less expensive – it’s often patently unfair because of lack of diversity among arbitrators.

Another overwhelming issue is that mandatory arbitration, which is in nearly every brokerage and consumer dispute resolution agreement, takes away your right to sue a firm that’s wronged you. That often limits your ability to be made whole and collect damages. And who sits on arbitration panels may restrict your legal options even more.

A recent study by the American Association for Justice found three major, disturbing flaws in the private arbitration system:

  • Arbitrators are mostly male and overwhelmingly white.
  • Women and minorities are more likely than white men to be forced into arbitration, which prevents them from having judges and juries hear their cases.
  • Corporate defendants disfavor female and minority arbitrators.

“At AAA and JAMS, the two largest consumer and employment arbitration providers in the country, 88% of arbitrators are white and 77% are male,” the study found. And that’s as diverse as it gets.

The pronounced lack of diversity has been a vexing problem for some time. “In 2019, members of the National Academy of Arbitrators determined that over the organization’s 72-year history only 35 Black, Indigenous, and people of color (BIPOC) had been admitted, just 2% of the overall membership. To put this into perspective, individuals who identify as BIPOC make up nearly 40%, and women make up 51%, of people living in the United States.”

The diversity gap among arbitrators translates into extremely low odds of winning an arbitration claim if you’re a woman or person of color. “Few people realize that forced arbitration provisions eliminate their constitutional right to a trial before a jury of their peers,” the study adds. “But for minorities and women, forced arbitration not only eliminates the jury but also all but ensures their case will be decided by a white male. A consumer is more likely to be struck by lightning than win a monetary award in forced arbitration as it is; being Black or female reduces their prospects even further.”

Forced arbitration, the study concludes, severely constrains your options to obtain justice in a dispute. “In arbitration, the arbitrator is judge and jury. And the process of selecting an arbitrator undergoes far less scrutiny than the same process for selecting a jury. Instead, forced arbitration is dominated by a small number of judges, retired judges, and corporate lawyers who have carved out a niche for themselves aiding businesses in avoiding civil jury trials, EEOC proceedings, and any other potentially public forum of justice.”

One of the most important decisions you can make if you believe you have a claim against your brokerage or investment advisor firm, is to hire an attorney that is experienced in navigating the pitfalls of arbitration practice. The lawyers at Stoltmann Law Offices have more than 50 combined years of experience representing investors in numerous arbitration forums, including FINRA, AAA, JAMs, and NFA.

If you invested with a broker-advisor and lost money as a result, you may have a claim to pursue. Please contact Stoltmann Law Offices, P.C. at 312-332-4200 for a free, no obligation consultation with a securities attorney. Stoltmann Law Offices is a contingency fee law firm which means we do not get paid until you do!


The posting on this site are mere OPINIONS and NOT statements of fact in any way whatsoever. The information should not be relied upon and there have been no findings made against the firms or individuals referenced on this site. In addition, this Blog is made available for educational purposes only and incorporates information from the web as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and Stoltmann Law Offices (161 N Clark Street 16th Floor Chicago, IL 60601). The Blog opinions should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.


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