Securities Law Commons^™

The Betrayal Of Mcmahon, Constantine N. Katsoris

Fordham Urban Law Journal

There is controversy over awarding punitive damages by arbitration in securities disputes. Securities disputes are unique because the vast majority of such disputes are filed at Self Regulatory Organizations (“SROs”) which are subject to SEC oversight. However, other securities disputes are filed at the American Arbitration Association (“AAA”), which is not subject to SEC oversight. As a result differing rules evolved for SRO arbitrations than those applicable at the AAA. No SRO rule directly authorized punitive damages but section 31(d) of the Uniform Code of Arbitration prohibits limiting the ability of arbitrators to make any award. Whereas a AAA rule …