USA Today (October 7, 2014 3:41 pm) -- The Financial Industry Regulatory Authority arbitration pools that decide many investor disputes with brokers lack diversity, raising the prospect the system may be "unfair," a new report charged Tuesday.

Issued by an organization of lawyers who represent aggrieved investors, the report found that the Wall Street self-regulator's arbitration pool is roughly 80% male, signaling under-representation of women.

The arbitrators in many cases are older than investors involved in arbitration cases, with an average age of 69 for those in the FINRA pool, the report found.

Additionally, FINRA doesn't disclose how and why it targets individuals to become arbitrators, the report said. The selection process is flawed with "inadequate" safeguards aimed at ensuring that arbitrators are impartial, and information on arbitrators' backgrounds may not always be accurate and up to date, the report concluded.

Arbitration fairness is important because virtually all U.S. investors who have disputes with their brokers and other financial professionals are barred from pursuing the matters in court. Instead, most of the matters are decided in FINRA arbitration proceedings.

The findings come as FINRA statistics show that investors were awarded financial compensation for damages in less than half of the arbitration cases decided from 2009-2014.

"There is no question that having a pool of arbitrators with diverse backgrounds and experiences will result in improved decision making," said Jason Doss, an Atlanta attorney and president of the Public Investors Arbitration Bar Association, the group that conducted the analysis.

"PIABA has showed that FINRA's arbitrator disclosure process fails at every step," he said, adding, "investors have no other choice but to conclude that arbitration is unfair."

FINRA challenged the findings, contending that the Wall Street self-regulatory group maintains aggressive efforts to seek arbitrators with diverse backgrounds and to provide investors with a "fair, efficient and cost-effective system to resolve disputes." FINRA said it has worked closely with the lawyer's group to select well-qualified arbitrators.

"The reality is that win rates increase or decrease depending upon the controversy involved, market events and counsel," FINRA said in a formal response. "We have made substantial efforts to recruit and train arbitrators from diverse background and will continue to do so."

But Rep. Keith Ellison, a Minnesota Democrat and sponsor of pending legislation aimed at outlawing mandatory pre-dispute arbitration agreements, said the new report's findings showed FINRA's arbitration system is "rigged against the investor."

Congress should enact Ellison's measure, PIABA said. The lawyers' organization also urged the Securities and Exchange Commission to ensure that an independent group is appointed to oversee the FINRA arbitration process.