The decision to give Workman credit for settlements was determined in part by the firm's resources, said Steve Luparello, Finra's vice chairman who oversees regulatory operations. The regulator has sanction guidelines that help determine what appropriate fines are in general, Luparello said.

Arbitration Awards

Finra hasn't sanctioned Leonard, whose Florida regulatory record shows more than 21 complaints from his clients at Workman, claiming more than $8 million in losses. Leonard, who couldn't be located, denied wrongdoing in the Florida regulatory record. Finra is still investigating individuals associated with Workman, Condon said.

Clients must generally resolve disputes with brokers through arbitration rather than through lawsuits because of clauses in their contracts. In 2010, the median amount won by investors through Finra arbitration was $129,800, or 42 percent of the median amount of $310,000 in compensatory damages sought by investors who won, according to data compiled by Securities Arbitration Commentator Inc., a Maplewood, New Jersey-based legal publishing and research firm.

The firm excluded cases where the customer asked for less than $25,000 as well as cases that didn't specify the amount of compensatory damages requested. Of the 882 arbitration cases that were decided in 2010, 47 percent resulted in customers being awarded damages, based on Finra data.

All-Public Panels

Arbitration is "far from perfect," but it's cheaper and faster than the public courts, said Finra's Ketchum. Starting in February, investors were given the option to pick an all-public panel of three arbitrators to decide the case instead of a panel composed of two public arbitrators and one from the industry. Since February, 77 percent of claims filed have selected the all-public panel, Condon said. It can take up to two years from when investors file their arbitration claims until the case is closed, said Jeffrey Erez, a securities attorney in Fort Lauderdale, Florida.

It's rare that arbitration claims lead to disciplinary actions such as fines or suspensions, according to Stuart Meissner, a securities attorney in New York and former state assistant attorney general.

"There's a breakdown between arbitration claims and enforcement actions," Meissner said. "It's only the most egregious cases."

Filing Claims

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