NEW YORK (TheStreet) -- It's no secret that aggrieved investors can wind up with a raw deal when they face off against stockbrokers in industry-run arbitration.

The hearings are held behind closed doors, the rules are written by an operation that's financed by Wall Street and the decisions of the arbitrators typically are issued with no explanation. Little surprise that many ugly details about the process stay private, too.

Now, a collection of consumer-friendly groups is pushing to get more of arbitration's secrets out in the open. The groups' demands matter, because every individual investor in America with a brokerage account is forced to forego court and agree instead to use a closed-door council endorsed by Wall Street.

In a letter to a task force of the Financial Industry Regulatory Authority, or Finra, the National Association of Consumer Advocates and eight other groups recently pressed for more disclosure of investigations, reports and other data by Finra or the Securities and Exchange Commission that might shed light on the secrets of industry-run arbitration.

When Do Investors Win?

The coalition is interested in things like how often investors are counted as arbitration "winners" even when they're awarded less than 100% of their losses. And which arbitrators are inclined to favor the securities industry -- or its customers -- when it's time to rule on a case.

Finra, which is financed by Wall Street but supervised by the SEC, runs the private sessions where investors' grievances are heard. In July, it announced the formation of a 13-member task force to consider ways to improve "the transparency, impartiality and efficiency" of arbitration.

Finra's Dispute Resolution Task Force, as it is called, was put together in the wake of bad publicity about Finra's arbitration business, from reports of an indicted arbitrator to revelations that brokers were using the arbitration forum to take black marks off their public records. Under fire, Finra has corrected some of its gaffes.

Mandatory arbitration has come under attack for years, including by politicians who have tried to outlaw it. But repeated legislative efforts have failed. That's despite the fact that arbitration's critics aren't typically endorsing the idea of shutting Finra's system down. They mostly are appalled that investors who might prefer to utilize their civil right to a trial by jury, can't.

Why Investors Can't Sue Brokers

It's bad enough that investors are stuck with a forum that may be tilted toward brokers. But there's a public policy issue here, too: for almost three decades, brokers have been able to dodge the public accountability that would be a matter of course in the courts.

Investors lost their right to sue a broker in court 28 years ago, when Shearson/American Express (AXP) went to battle against Eugene and Julia McMahon, a Yonkers, N.Y., couple who said they'd lost $350,000 after their broker churned their account. The McMahons wanted to go to court. But Shearson said they couldn't, because they'd signed an agreement saying they would forego court in the event of a dispute.

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