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Arbitration-Enforceability Of Arbitration Agreement In Action By Investor Under The Securities Act Of 1933, Rinaldo L. Bianchi

Michigan Law Review

Plaintiff sustained a severe loss in the resale of securities bought from the defendant. Alleging fraud he sued under section 12(2) of the Securities Act of 1933, which provides for liability when prospectuses or oral communications sent through channels of interstate commerce falsely state or omit a material fact so as to render the statement misleading. Pursuant to the Federal Arbitration Act, defendant moved for an order staying proceedings until arbitration had been had in accordance with an agreement between the parties. The district court denied the order, saying that the non-waiver clause of the Securities Act voided a waiver …