Law Commons^™

The Customer's Nonwaivable Right To Choose Arbitration In The Securities Industry, Jill I. Gross

Brooklyn Journal of Corporate, Financial & Commercial Law

Arbitration has been the predominant form of dispute resolution in the securities industry since the 1980s. Virtually all brokerage firms include predispute arbitration agreements (PDAAs) in their retail customer contracts, and have successfully fought off challenges to their validity. Additionally, the industry has long mandated that firms submit to arbitration at the demand of a customer, even in the absence of a PDAA.

More recently, however, brokerage firms have been arguing that forum selection clauses in their agreements with sophisticated customers (such as institutional investors and issuers) supersede firms’ duty to arbitrate under FINRA Rule 12200. Circuit courts currently are …

Legal Summaries, Jamie H. Kim

Journal of the National Association of Administrative Law Judiciary

No abstract provided.

Issuing New Shares And Preemptive Rights: A Comparative Analysis, Marco Ventoruzzo

Richmond Journal of Global Law & Business

No abstract provided.

Ethical Concerns When Settlement Includes An Agreement About Expungement, Christine Lazaro

Faculty Publications

(Excerpt)

When a customer makes a complaint against his or her broker, oftentimes that complaint is reported on the broker’s public record and made available to the public through the BrokerCheck system provided by the Financial Industry Regulatory Authority (FINRA). The National Association of Securities Dealers (NASD) established BrokerCheck in 1998 to provide the public with information about the professional background, business practices, and conduct of brokers and brokerage firms.

Understandably, brokers generally attempt to keep as clean a record as possible because potential clients may use BrokerCheck to decide whether to invest with a particular broker. To remove a …

The Tenth Annual A. A. Sommer, Jr. Lecture On Corporate, Securities, & Financial Law, Elisse B. Walter

Fordham Journal of Corporate & Financial Law

No abstract provided.

Fin Rah!...A Welcome Change: Why The Merger Was Necessary To Preserve U.S. Market Integrity, Yesenia Cervantes

Fordham Journal of Corporate & Financial Law

No abstract provided.

Working Toward Fair Treatment For Retail Investors, Barbara Black

Faculty Articles and Other Publications

Twenty years ago, in Shearson/American Express, Inc. v. McMahon, the Supreme Court held that brokerage firms could require their customers to arbitrate all their disputes in industry-sponsored fora - a decision that had great significance for the law of arbitration as well as securities regulation. In 1996, a blue-ribbon task force released its report, assessing the securities arbitration process at National Association of Securities Dealers, Inc. (NASD), the principal securities arbitration forum, and the report led to several symposia on the topic coinciding with the tenth anniversary of McMahon. Since then, arbitration scholars and practitioners have intensified the debate over …

Are Issuers Of And Dealers In Securities Immune From Lawsuits Arising Under Federal And State Antitrust Laws?, Hannibal Travis

Faculty Publications

Conduct potentially subject to regulatory scrutiny by federal agencies such as the Securities Exchange Commission (SEC) is not necessarily immune from antitrust liability. The Supreme Court previously held that an anticompetitive conspiracy in the mutual fund industry was immune from antitrust liability because the SEC had the primary statutory authority to prohibit or permit such conspiracies. This case raises the question of whether another alleged conspiracy—to restrict the availability of certain initial public offerings of securities (IPOs)—is similarly immune.

Explaining "Explained Decisions": Nasd's Proposal For Written Explanations In Arbitration Awards, Marilyn Blumberg Cane, Ilya Torchinsky

Faculty Scholarship

No abstract provided.

A "Tic"Ing Time Bomb: Rule 506 Meets Section 1031, Elizabeth A. Whitman

Fordham Journal of Corporate & Financial Law

No abstract provided.

Texas Annual Survey: Securities Regulation, George Lee Flint Jr

Faculty Articles

The definitions, especially those relating to the issues of what constitutes a security, who may recover, and the territorial reach, determine the scope of the securities acts. The Fifth Circuit issued one decision concerning standing to sue under section 11 of the Securities Act of 1933.

The State Securities Board amended its form for public information charges and billing detail to reflect current fees for public information established by the Texas Building and Procedures Commission. The Board adopted new rules reorganizing the exemption for sales to financial institutions and certain institutional investors under the Texas Securities Act (“TSA”) and reconsidered …

Demythologizing The Stock Exchange: Reconciling Self-Regulation And The National Market System, Onnig H. Dombalagian

University of Richmond Law Review

No abstract provided.

The Fourth Annual Albert A. Destefano Lecture On Corporate, Securities &Financial Law, William Michael Treanor Introduction, Jill E. Fisch Introduction, Constantine N. Katsoris, John F.X Peloso Moderator, Brandon Becker, Robert Colby, Richard G. Ketchum, Mark E. Lackritz, Annette L. Nazareth, Mary L. Shapiro

Fordham Journal of Corporate & Financial Law

No abstract provided.

Texas Annual Survey: Securities Regulation, George Lee Flint Jr

Faculty Articles

The definition of securities is constantly evolving, and court cases help define this concept. Other cases help illuminate standing to sue. Two courts considered the application of the Texas Securities Acts in multi-state situations.

The State Securities Board amended its hearings rules to give the Director of Inspections and Compliance Division authorization to sign a notice of hearing in administrative cases. The Board initiated numerous enforcement actions against issuers who did not register their securities. It also issued a number of no-action letters dealing with issuers. In addition, the Board amended its rules for registration of dealers several times during …

Brokers And Advisers – What’S In A Name?, Barbara Black

Fordham Journal of Corporate & Financial Law

No abstract provided.

Developing A Law/Business Collaboration Through Pace's Securities Arbitration Clinic, Jill I. Gross, Ronald W. Filante

Fordham Journal of Corporate & Financial Law

No abstract provided.

Is Securities Arbitration Fair To Investors?, Barbara Black

Faculty Articles and Other Publications

Most disputes between customers and their brokerage firms are resolved through arbitration as a result of the Supreme Court's holding in Shearson/American Express, Inc. v. McMahon. McMahon was part of two larger trends of the Supreme Court: the Court's general pro-arbitration trend and its efforts to remove private securities fraud claims from federal court. Many investor advocates viewed McMahon as anti-investor, a view that continues to have support today.

This is an assessment of the current securities arbitration process from the perspective of an investor advocate. In my view, investors may fare better in arbitration than in litigation. Accordingly, the …

Texas Annual Survey: Securities Regulation, George Lee Flint Jr

Faculty Articles

The ease of becoming judgment proof in Texas, with liberal exemptions from execution of judgment, makes secondary liability very important. Texas statutes provide for four such liability theories: aiding and abetting, control person liability, third party actual awareness liability, and third party beneficiary liability. In addition to these four liability theories, federal law adds primary liability for some secondary parties.

The 78th Texas Legislature made two changes geared toward reducing the cost to the State of Texas in operating the State Securities Board. The Board also made several rule changes to increase revenues and to make other non-substantive changes. Moreover, …

Missing The Mark: Nasd Rule 2711 And Nyse Rule 472 Mistakenly Emphasize Disclosure Rather Than Amending The Pleading Requirements Of Pslra, James J. Barney

NYLS Law Review

No abstract provided.

Analyst Conflicts Of Interests: Are The Nasd And Nyse Rules Enough?, Karen Contoudis

Fordham Journal of Corporate & Financial Law

No abstract provided.

From Behind The Corporate Veil: The Outing Of Wall Street's Investment Banking Scandals - Why Recent Regulations May Not Mean The Dawn Of A New Day, Gina N. Scianni

Fordham Journal of Corporate & Financial Law

No abstract provided.

The Irony Of Securities Arbitration Today: Why Do Brokerage Firms Need Judicial Protection?, Barbara Black

Faculty Articles and Other Publications

In 1987 the securities industry achieved a major victory. Until then, because of the Supreme Court's 1953 holding in Wilko v. Swan that agreements to arbitrate federal securities claims contained in customer agreements were unenforceable, customers could sue brokerage firms and their salespersons in court, frequently before juries amenable to sizable verdicts, including punitive damages.

Illustrating a classic example of “be careful what you wish for,” brokerage firms no longer find arbitration entirely to their liking. Increasingly they turn to the courts to resist arbitration, to interfere with ongoing arbitration, or to undo the results of arbitration.

Unfortunately, both federal …

Nasd Applications Require Arbitration Of Employment Disputes - Mouton V. Metropolitan Life Insurance Co., Christina S. Young

Journal of Dispute Resolution

Under the Federal Arbitration Act's (FAA) mandate favoring arbitration, numerous statutory claims are subjected to arbitration. For employment disputes falling under Title VII, competing approaches based on whether the employment agreement was a union or a non-union agreement, have been adopted. Union agreements to arbitrate employment disputes are generally not compelled to arbitrate. Conversely, in a non-union employment agreement, the broad arbitration clauses are interpreted to require arbitration of Title VII claims. These inconsistent rules have been applied to the detriment of non-union employees.

New Competitors, Thomas Ryan, Mary M. Mcdermott-Holland, Arthur Kearney, Dennis Marino, Arthur Pacheco, James J. Mcdermott Jr.

Fordham Journal of Corporate & Financial Law

No abstract provided.

Arbitration Of Workplace Discrimination Claims: Federal Law And Compulsory Arbitration, Norris Case

Touro Law Review

No abstract provided.

The Pros And Cons Of A Self-Regulatory Organization For Advisers And Mutual Funds, Tamar Frankel

Faculty Scholarship

Congress is seriously considering bills to establish self-regulatory organizations (SROs) for investment advisers (advisers) and investment companies (Funds). These bills would require members of the investment management industry to regulate themselves under the watchful eye of the Securities and Exchange Commission, similar in approach to the regulation of broker-dealers by the National Association of Securities Dealers, Inc. (NASD) and the securities exchanges. Proposals to establish SRO for investment advisers have arisen before. However, those proposals did not cover Funds and their advisers,

Securities Regulation: Challenges In The Decades Ahead, J. William Hicks

Indiana Law Journal

No abstract provided.

Swimming Against The Deregulatory Tide, Harry S. Gerla

Vanderbilt Law Review

Increasing pressure from institutional investors during the last two decades has led to indirect discounting practices that some commentators contend threatens the fixed price offering system. In response to this concern the SEC in 1980 approved new NASD rules designed to bar direct or indirect discounting in fixed price public offerings of securities. In this Article Professor Gerla argues that the SEC erred in approving the new NASD rules. Professor Gerla states that the new rules change drastically the Commission's policy that the fixed price system operate without direct or indirect government enforcement. Further, he contends that the SEC approved …