Others disagree. They say experienced arbitrators have hands-on experience that enable them to better understand these unfair practices and render swift and sure justice.

Arbitration typically takes 12-15 months, which is much faster than courts. Because the panels are familiar with most issues, there is not as much need for expert testimony as there would be in court. That makes the process quicker and cheaper.

Nevertheless, some expert testimony is usually required. That testimony must be based on the facts. Consequently, as said above under Keep Neat, Orderly Files, the party with the better-kept files has an advantage.

Unfortunately, it is often necessary to retain a stockbroker to give expert testimony as to the standards of the profession. In the securities industry, one hand often washes the other, which makes stockbrokers reluctant witnesses. In such cases, it is usually best to approach someone who has retired.

Small investors are at a tremendous disadvantage in complex cases because there is not enough at stake to support the cost of adequate expert testimony and the legal counsel to present the case effectively. In such cases, the investor's only recourse is to complain to NASD and the state attorney general and hope someone else will carry the ball. The NASD website is the place to start.

Not surprisingly, brokerage houses, even in cases where their broker is clearly at fault, often play hardball in order to intimidate the customer (and the customer's lawyer). In almost every case, they settle on the eve of the arbitration hearing. Should you encounter that, demand a hearing as soon as possible.