In what could be a step toward solving its longstanding problem with unpaid arbitration awards, for the first time FINRA has released data about the issue with an eye to "further enhancement of recovery" for victims.

The move follows a report by the Public Investors Arbitration Bar Association and an investigation by Financial Planning into the issue.

For investors who sought relief from FINRA's privately run arbitration forum, which is not open to public scrutiny, roughly 25% to 30% of their awards went unpaid since 2012, the new data show. In 2013, that meant 225 arbitrations failed to deliver more than $60 million to aggrieved customers whose advisors or their firms caused them losses, according to a report by PIABA.

The "FINRA report is a positive first step in addressing the unpaid arbitration award issue in a serious way, and hopefully a new dawn in trying to solve it," says PIABA's president, Andrew Stoltmann.

FINRA says in a statement that it plans to organize discussions with other regulators and policymakers to "address the issue of customer recovery, identify additional data or analysis that may help inform effective decision-making in this area and consider potential courses of action."

For its part, the Financial Services Institute, an advocacy group of financial advisors and firms, expressed concern about how FINRA might structure any future recovery program.

"The solution to this problem should not require those who honor their obligations to bear the burden of the bad acts of those that left the industry or are otherwise avoiding their responsibilities," the institute said in a statement. "We look forward to participating in this important dialogue with regulators, policy makers and other stakeholders, and appreciate FINRA’s efforts to initiate it."

The establishment of a recovery pool — the main remedy PIABA advocates — may prompt more complaints by investors who currently lack confidence in the integrity of FINRA arbitration, says securities lawyer Ben Edwards, who is on the law school faculty at the University of Nevada in Las Vegas.

"The FINRA data only tell a small part of the story," Edwards says. "Investors probably suffer substantially more damage than these statistics reveal, because people do not bring arbitration [complaints] if they don't think they can recover."

Ann Marsh

Ann Marsh

Ann Marsh is a senior editor and the West Coast Bureau Chief of Financial Planning. Follow her on Twitter at @Ann_Marsh.