FINRA is expanding its current pilot arbitration program that allows investors to choose to have their cases heard before a panel of three public arbitrators.

Generally, one so-called ‘industry arbitrator’ has been required to sit on FINRA arbitration panels. And, the requirement of the industry arbitrator has caused controversy among investor advocates who argue that it creates an unfair bias. An industry arbitrator is someone currently working in the financial services industry, someone who has worked in the industry in the past five years or a retired person who spent a substantial amount of his or her career in the industry.

“I have nothing against industry arbitrators per se,” says Brian Smiley, president of the Public Investors Arbitration Bar Association, an organization that represents investors in claims against their advisors. “However, it’s structurally unfair to require an industry arbitrator in cases.”

FINRA launched the two-year pilot program in October last year. Under the program, investors with complaints against participating firms (which includes all the major wirehouses) could choose to have their case heard before an all-public panel. However, the program only allowed 276 cases to be heard this way. This year, FINRA says 411 cases will be heard under the program.

In the first year of the program, each of the major wirehouses agreed to have 40 cases each heard before an all-public panel, and those cases were all allotted before the year was up. In the second year, the wirehouses have agreed to allow 60 cases to be heard under the program.

In addition, Raymond James Financial Services/Raymond James & Associates, Chase Investment Services and Oppenheimer & Co. have joined the program. Raymond James and Chase will allow 10 cases to be heard under the program for the year, and Oppenheimer will allow 15 cases.

However, the reforms don’t go far enough for some. The North American Securities Administrators Association, an organization that represents state securities regulators, wants to see mandatory arbitration clauses scrapped altogether.

“The only chance of recovery for most investors who fall victim to Wall Street wrongdoing is through a single securities arbitration forum controlled by the securities industry,” said NASAA president Denise Voigt Crawford in a statement. “NASAA believes that the securities arbitration system should be truly voluntary and that Congress should end mandatory securities arbitration.”