"Volatility for sure drives claims," said George Friedman, who served as Finra's director of arbitrations from 1998 to 2013 and now is principal of George H. Friedman Consulting LLC in Teaneck, N.J.
Friedman, however, noted there have been periods of volatility so far this year, but it has not been sustained. In years past, he said, it was virtually guaranteed that a sustained correction would lead to an increase in arbitration filings several months later.
He feels that although the Puerto Rico bond crisis has been ongoing for several years, filings may be up this year because attorneys are rushing to file their cases as they battle against the statute of limitations.
"On the customer side, I think it's predominantly the Puerto Rico cases," he said.
Securities attorneys heavily involved in Finra proceedings, however, pointed squarely at market volatility as the primary cause of the increased case filings.
"Investors get sad and worried about their portfolios," Meissner said. "They sell out and there are big losses."
Attorney Adam Gana, who defends investors in Finra proceedings, said he's seeing this trend in his practice, where there has been an uptick in cases involving theft and "selling away"—instances where brokers sell products not approved by their firms that turn out to be part of a fraud or Ponzi scheme.
The reason this happens, he said, is that it's easier to hide wrongdoing when the markets are thriving and investors are relatively content.
"As the markets go down, case filings go up," said Gana, managing partner at the law firm of Gana Weinstein LLP, with offices in New York and Chicago. "Bad markets expose bad portfolios."
It's not just investors who crank out the complaints when the markets go bad, attorneys noted.