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Full-Text Articles in Securities Law
Working Toward Fair Treatment For Retail Investors, Barbara Black
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 …
Is Securities Arbitration Fair To Investors?, Barbara Black
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 …
The Irony Of Securities Arbitration Today: Why Do Brokerage Firms Need Judicial Protection?, Barbara Black
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 …