December 11, 2019 Articles

SEC Policy Against Mandatory Arbitration Faces Challenge

There have been several attempts over the years by business interests to change the policy, but those efforts have been unsuccessful in the face of strong political pushback.

By Mark Kantor

For many years, the staff of the Securities and Exchange Commission (SEC) has maintained an informal policy of refusing to permit registration of public stock offerings if the underlying company instruments require arbitration of disputes between shareholders and the company rather than court litigation. There have been several attempts over the years by business interests to change that informal policy, but those efforts have been unsuccessful in the face of strong political pushback. Here is one online  article about the controversy written by an opponent of changing the SEC’s informal policy. There are numerous other articles on the topic that are readily available online. 

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